KUALA LUMPUR (May 29): Tan Sri Azmil Khalili Khalid is set to take over Anih Bhd, which operates the Kuala Lumpur-Karak Highway and the East Coast Highway Phase 1 (LPT1).
Anih’s shareholding restructuring exercise has been given the green light by the government, prompting MARC Ratings to upgrade the outlook on its RM2.5 billion senior sukuk programme to ‘stable’ from ‘negative’, the rating agency said in a statement.
“The stable outlook reflects the abatement of the uncertainty surrounding the approval process for Anih to restructure its shareholdings,” the agency said. “MARC Ratings understands that the change in ownership has been authorised; this will facilitate Anih’s refinancing plan for the outstanding sukuk.”
Under the restructuring, Azmil is expected to increase his stake in Anih from 49% to 100% by the third quarter of this year, MARC said, potentially bringing an end to a legal battle started six years ago with his late father-in-law Tan Sri Dr Nik Hussain Abdul Rahman.
On completion, Anih will accelerate its refinancing plans, including the early redemption of the sukuk programme by this year end, MARC noted.
End to family feud in sight
Prior to the restructuring, Anih was 51% owned by the estate of Nik Hussain, while Azmil and his wife, Nik Fuziah Nik Hussain, who is also Nik Hussain’s eldest daughter, owned the remaining 49%.
The legal dispute between Nik Hussain and Azmil began in 2018 when Nik Hussain contended that Azmil and Nik Fuziah’s shares in Anih and the junior bonds tied to the highways were being held by the pair as his trustees.
However, Azmil and Nik Fuziah counterclaimed, alleging that there was an “underlying partnership” between them and Nik Hussain that dated back to when Nik Hussain and Azmil founded MTD Capital, the ultimate holding company of Metramac Corp Sdn Bhd and MTD Prime Sdn Bhd.
Anih obtained the first phase of the East Coast Expressway and KL-Karak toll concessions in 2011 after it acquired the entire business and undertakings of Metramac Corp and MTD Prime for RM3.25 billion.
Nik Hussain and Azmil established Anih as a special vehicle for the acquisition, which was funded through a RM2.5 billion senior sukuk musharakah programme and RM620 million in unrated junior bonds.
Anih then signed a supplemental concession agreement with the government in November 2022, just before the 15th general election on Nov 19, to extend its toll concession on the Kuala Lumpur-Karak Highway and phase one of the East Coast Expressway to 2069.
The initial 28-year concessions were previously set to expire in 2032.
Nik Hussain, a former politician who served as deputy minister of works and public amenities under then prime minister Tun Hussein Onn before transitioning to the corporate world, passed away in March 2022.
Azmil currently sits on the boards of several listed entities, including UEM Edgenta Bhd (KL:EDGENDA), Reach Energy Bhd (KL:REACH), Sapura Industrial Bhd (KL:SAPIND), as well as several private limited companies.
MARC draws comfort from stable traffic
On Wednesday, MARC also affirmed its AAIS rating, citing steady traffic on Anih's mature road network that saw a 2.5% year-on-year increase to 68.2 million vehicles in fiscal year 2024 (FY2024).
Traffic growth rates would also remain steady, hovering around their historical and mature growth rates of about 1.5% to 2% each year, according to MARC’s projections.
The agency also drew comfort that Anih faces no immediate liquidity pressure for its RM38 million payment due in May 2024 and further payments totalling RM238 million in November 2024, thanks to its RM256.9 million cash reserve and strong operations generating more than RM200 million cash annually.
The finance service coverage ratio is projected to remain above the required 1.75 times, ranging from 1.78 times to 1.80 times by the end of FY2025, the agency noted.