This article first appeared in The Edge Malaysia Weekly on March 3, 2025 - March 9, 2025

STATE-controlled Permodalan Nasional Bhd (PNB) is understood to be looking to hive off its 51.02% stake in highway operations and maintenance outfit Prolintas Infra Business Trust (Prolintas IBT) (KL:PLINTAS).

It is learnt that PNB has made overtures to a few potential buyers on the possible sale of the block in Prolintas IBT but negotiations are understood to be preliminary.

In an emailed response to The Edge, PNB merely says, “With reference to your recent enquiry on whether PNB is looking to sell its 51% stake in Prolintas IBT, we wish to inform that as a matter of policy PNB does not comment on rumours or speculation.”

A source familiar with the sale says PNB may not limit it to the 51.02% stake in Prolintas IBT but could also be looking to sell the Sungai Besi–Ulu Klang Elevated Expressway (SUKE) and Damansara-Shah Alam Elevated Expressway (DASH).

“There is talk of a lock, stock and barrel sale of all the PNB highways,” the source says, adding that “the current management of PNB does not view highways in a good light”.

SUKE and DASH are held via PNB’s wholly-owned Projek Lintasan Kota Holdings Sdn Bhd.

It is understood that a process, which could commence soon, is likely to be undertaken, with interested parties required to make a bid.

Prolintas IBT has four highways in its portfolio. Projek Lintasan Kota Sdn Bhd operates the 7.4km Ampang–Kuala Lumpur Elevated Highway (Akleh), which runs from Jalan Sultan Ismail to the suburbs of Taman Ampang Utama.

Prolintas Expressway Sdn Bhd runs the 25km Guthrie Corridor Expressway (GCE) which connects Shah Alam and Rawang; Projek Lintasan Shah Alam Sdn Bhd manages the 14.7km Lebuhraya Kemuning-Shah Alam (LKAS), which connects Lebuhraya Shah Alam in the south to Federal Highway Route 2 in the north, and Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd operates the SILK Highway — a 37km highway that runs through Kuala Lumpur city centre, Cheras, Sungai Long, Balakong, Putrajaya, Semenyih and Bangi.

For its financial year ended December 2024, Prolintas IBT chalked up a net profit of RM26.57 million on the back of RM321.67 million in revenue. For FY2023, the company suffered a net loss of RM73.49 million on RM134.17 million in revenue.

At end-2024, Prolintas IBT had deposits, cash and bank balances of RM211.88 million, and RM273.38 million in other investments. On the other side of the balance sheet, the highway operator had long-term borrowings of RM2.34 billion and no short-term borrowings.

On its prospects, Prolintas IBT said in the statement accompanying its FY2024 financial results, “The highways which are strategically located within the Klang Valley are expected to benefit from the economic activity centred in the Klang Valley. Frost & Sullivan forecasts the market size in terms of revenue of urban highways in the Klang Valley will grow at a CAGR (compound annual growth rate) of 4.6% from RM3.1 billion in 2023 to RM3.7 billion in 2027.”

The company adds that it “maintains an optimistic outlook regarding the future performance of the highways. The Trustee-Manager’s key focus is to complement the organic growth of the highways with value-added services and amenities along the highways to maximise its revenue-generating potential and to establish the highways as preferred routes for travel”.

SUKE is a 24.4km tolled road connecting Sri Petaling and Ulu Kelang in the Klang Valley, while the 20.1km DASH is directly linked to the Penchala Link, Damansara-Puchong Expressway and GCE.

While SUKE commenced operations in early 2023, DASH started collecting toll in November 2022.

For its financial year ended Dec 31, 2023, SUKE suffered an after-tax loss of RM300.02 million on the back of RM74.88 million in revenue. As at end-2023, it had total assets of RM8.07 billion and total liabilities of RM7.24 billion. Meanwhile, its accumulated losses stood at RM464.74 million.

DASH, meanwhile, suffered an after-tax loss of RM196.82 million on RM62.16 million in revenue for its financial year ended Dec 31, 2023. During the period in review, the company had total assets amounting to RM5.3 billion and total liabilities of RM4.48 billion. As at end-2023, it had accumulated losses of RM310.85 million.

Prolintas IBT, which was listed in March last year, has been in the news a number of times, albeit for the wrong reasons.

In June last year — just three months after its flotation exercise — the Malaysian Anti-Corruption Commission (MACC) remanded Prolintas IBT’s CEO Datuk Mohammad Azlan Abdullah over alleged bribery in connection with two highway projects worth RM1.67 billion. Mohammad Azlan was one of nine people MACC brought in for questioning.

In late January this year, MACC obtained the requisite approvals to prosecute two Prolintas IBT officials, namely chief operating officer Rostam Shahrif Tami and project manager Zairulnizam Rohani, for bribery-related offences involving SUKE.

In February this year, Mohammad Azlan stepped down from the board of Prolintas IBT’s trustee-manager firm, citing personal commitments.

In mid-February, two subcontractors involved in the construction of SUKE sought legal redress against Projek Lintasan Kota Holdings Sdn Bhd (which holds the 51.02% in Prolintas IBT for PNB) of over RM500 million.

Syarikat Muhibah Perniagaan dan Pembinaan Sdn Bhd and Gabungan Strategik Sdn Bhd, a unit of publicly traded Gabungan AQRS Bhd (KL:GBGAQRS), are alleging that the defendants caused them losses and damaged their reputations during the project’s implementation.

Whether the suit and the many issues plaguing Prolintas IBT will adversely impact PNB’s asking price remains to be seen.

Prolintas IBT’s initial public offering involved an offer-for-sale of up to 468.7 million units and raised RM445.3 million. At its close of 96.5 sen last Friday, Prolintas IBT had a market capitalisation of RM1.06 billion. 

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