Following the news report on EPF’s purchase of the 40 per cent stake in Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd (Kesturi) which is the concessionaire of the Duta-Ulu Klang Expressway (DUKE), for RM1.13 billion from Ekovest Berhad, the Employees Provident Fund (EPF) clarifies that this acquisition is subject to the highway achieving the same returns we have been expecting from the other highways and infrastructure that we invest in. The valuation for the 40 per cent stake is derived from:
Extension to DUKE 1’s toll concession from 34 years to 54 years with an option of another 10-year extension;
Valuation of the new DUKE Phase 2, which is under construction and due to be completed mid-2017
The EPF is to conduct a due diligence exercise, which will include an independent traffic study as well as financial and legal assessments, to ensure the basis of the valuation is fair and reasonable. The EPF has previously acquired a number of highway assets and the expected project return for the investment in DUKE is in line with EPF’s other highway investments.