THE TALIWORKS-CIMB-STANDARD CHARTERED-EPF CONNEXION

TALIWORKS Corp Bhd (Taliworks) has gone into toll road operations by buying a controlling stake of 55 per cent stake in Cerah Sama Sdn Bhd (CSSB) the operator of the Cheras-Kajang highway. CSSB owns and operates the Cheras-Kajang highway through Grand Saga Sdn Bhd, which holds the concession right up to 2027. It will pay out RM55.5 million for this stake.

Taliworks, a water and waste-related specialist has formed a strategic partnership with South East Asian Strategic Assets Fund (SEASAF) - which will separately buy 35 per cent of CSSB for RM35.3 million - to pursue investments in toll road concessions, both in Malaysia as well as in the Southeast Asian region. SEASAF is a fund that is jointly sponsored by the CIMB Group and Standard Bank plc, and co-sponsored by the Employees Provident Fund.

Taliworks and SEASAF will collectively own 90 per cent in CSSB, which will be their vehicle for toll road investments.

Taliworks has been on the look-out for viable infrastructure projects to generate recurring income, while continuing to grow the water-related businesses. This new venture will elevate Taliworks into a next phase of growth and will position the company to be a full-fledged and formidable infrastructure player in the region.

Taliworks would sell RM225 million of convertible bonds to raise funds for its expansion. Goldman Sachs will take up RM180 million of the bonds, while the rest will be placed out to other investors.

The proceeds from the bonds will be utilised by Taliworks to look into potential investments abroad in water and waste-related infrastructure projects particularly in China and Middle East. The company envisaged overseas businesses will account for half of the group's revenue over the next three to five years from the less than five per cent currently.

Besides paying RM55.5 million for the CSSB stake, Taliworks has also committed up to RM52.2 million to help the former reduce its bank borrowings. The proposals are expected to be completed in the final quarter of 2007.

CSSB made a net profit of RM54 million for the 11 months ended May 31 2006.

The new shareholders intend to list CSSB after it has build up a sizeable portfolio of investments. The may list CSSB in about 7 years time or even earlier. They have not decided on which stock exchange to list it.

Heartsong