IJM Corp - unlocking value

Apart from growing its business organically, IJM Corp Bhd has considered unlocking the value of its numerous highway concession assets by bundling them together into one entity.

The diversified company currently has four infrastructure projects locally, namely, the New Pantai Expressway, the Besraya Expressway, Lebuhraya Kajang-Seremban and Kuantan Port. It also has three toll concessions and one under construction in India and one in Argentina.

The Besraya Expressway is currently being extended by another 12km, with another toll plaza expected to be completed in 2014.

Funds are buying into the company for its long-term growth. Its major shareholders are the Employees Provident Fund with a 11.4% stake, Amanahraya Trustees Bhd with 10.4%, Kumpulan Wang Persaraan (Diperbadankan) with 7.4% and Lembaga Tabung Haji with 5.3%. Foreign funds collectively hold about 40% in IJM Corp.

Foreign shareholdings ranging from 32% to 42%.

Shareholders’ concern is its high gearing ratio. Its net debt to shareholders’ funds stood at 58.4% in FY13. Its gearing ratio may seem very high but the bulk of it is non-recourse debt. A total net debt of RM3.27bil, of which 75%, or RM2.48bil, is non-recourse debt. It is borrowing to build its assets. Its debt is in the concession business.