(July 8): Gamuda’s substantial shareholders — those that own more than 5% of the issued shares of the construction and property development company — are concerned about the takeover offer from the Minister of Finance Inc (MOF Inc) for the four highway concessionaires that the company has stakes in.
This is because the water and expressway concessions business accounts for about a third of Gamuda’s profit before tax (PBT). Without it, the company’s earnings would become cyclical and lumpy as it would be left with the engineering and construction and property development businesses.
“If you look at Gamuda’s balance sheet, the net book value of its expressway assets is about RM1 billion ($327.6 million) and the business contributes about RM200 million to earnings every year. That is a return of about 20%, which is a very good return,” says an analyst.
