A Gamuda-linke highway company have seen a significant hike of share price ever since the government announced its intention to take over four highway concessionaires late last week. The RM2.47 billion offer for LITRAK (which operates Lebuhraya Damansara-Puchong) sees a major share jump to RM4.86 at 10.59am earlier today, or up by 15.44 per cent.`

The government’s offer is made via a special purpose vehicle (SPV) under the Ministry of Finance Inc. that includes the 50 per cent Litrak-owned shares of Sprint highway for RM1.984 billion. The other highways that the government wants to take over are Kesas (for RM1.377 billion) and SMART (for RM369 million). This totals to RM6.2 billion.

According to a report by the Star, Gamuda holds 44 per cent ownership of Litrak, 52 per cent in Sprint, 70 per cent in Kesas, and 50 per cent of SMART. Despite the sharp increase in price for Litrak since this morning, Gamuda fell by 3.66 per cent to RM3.69.

According to our records, some of the concessions for these highways are about to end – namely for Kesas, which is valid for another 8 years, and 11 years for the LDP. The latter is also not scheduled for another toll increase all the way to the agreements’ expiry, hence no compensation from the government should be expected.