UEM to use Cipali toll road divestment for Msia's key infrastructure
UEM Group Bhd, the infrastructure arm of Khazanah Nasional Berhad, said it will use part of the proceeds from divesting its entire stake in Indonesia’s Cikopo-Palimanan (Cipali) toll road for investments in the development of Malaysia’s key national infrastructure.
“Once all conditions of the recently signed Conditional Sales Purchase Agreement (CSPA) are met, UEM Group, will utilise part of the proceeds from the monetisation for investments in the development of Malaysia’s key national infrastructure,” the company said in a statement today.
Canada Pension Plan Investment Board (CPPIB) and its partner, PT Baskhara Utama Sedaya, announced in a statement yesterday that they will jointly acquire the 55 percent stake in PT Lintas Marga Sedaya (LMS), currently held by PLUS Expressways International Bhd - a subsidiary of the UEM Group, which is ultimately wholly-owned by Khazanah.
CPPIB said the transaction is expected to be completed in the fourth quarter of 2019, subject to customary closing conditions, including regulatory approvals.
LMS is the concession holder and operator of Cipali toll road, which is one of the longest toll roads in Indonesia.
According to UEM, it will continue to explore other investment opportunities in Indonesia.
The company’s presence in Indonesia would continue via its subsidiaries, namely UEM Edgenta Bhd, which had in July 2019 set up a regional office in Jakarta and is actively pursuing opportunities in project management, road maintenance, healthcare and asset facilities management services sector.
Spanning 117km, the Cipali toll road is not only one of the longest operational toll roads in Indonesia, but also served as a critical link in the transportation network on Java island, and is part of the Trans Java Toll Road network.