MTD Capital says MTD Infraperdana undervalued
Category: Publication - The Star
MTD Capital Bhd may continue to buy MTD Infraperdana Bhd shares in the belief that the stock is undervalued and will sell down at the appropriate time in order to meet the minimum 25% public spread.
MTD group managing director Datuk Azmil Khalid said MTD Capital had no intention of taking MTD Infraperdana private and was confident of getting the buyers for the selldown.
"We feel that the company is undervalued," he said, adding that MTD Capital would continue to buy MTD Infraperdana shares "if the prices are within an internally set band".
"We have had a lot of interest in terms of buyers, there are some interest from funds," he said.
Speaking to reporters after MTD Infraperdana's EGM in Batu Caves on Aug 12, Azmil added that MTD Capital would sell down when they felt that the time and price was right.
MTD Capital has been accumulating MTD Infraperdana shares over the last two months, bringing its total shareholding to beyond the 75% threshold, breaching the minimum public spread.
As at Aug 9, MTD Capital held a 76.55% stake comprising 833.39 million shares in MTD Infraperdana.
MTD Infraperdana itself is no longer allowed to buy back its own shares once the public spread is breached.
Meanwhile, Azmil said MTD InfraPerdana would see the contribution from its recent acquisition of Metramac Corporation Sdn Bhd for RM245 million to contribute to the group's fiscal year third quarter results.
The acquisition, which is expected to be completed by October, is part of the company's rationalisation of its operations. "The acquisition of Metramac will streamline the groups' operations," said Azmil.
He said the growth in traffic volume for the Eastcoast highway had seen an increase from its initial 8,400 per day to the current 9,200 per day, which is "in line with the company's expectations".
"As for the KL-Karak highway, historically we have grown at a rate of about 7%, (compared) with urban roads growing at about 3% to 4%," said Azmil.
Currently, about RM90 million to RM100 million is derived from KL-Karak highway, with about RM70 million being contributed from the Eastcoast highway.
The Metramac acquisition is expected to contribute another RM40 million to the group's revenue.
By Malar Velaigam
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