New Straits Times

30 January 2007
MTD Infraperdana plans RM400m capital repayment

MALAYSIA’S second-largest toll road operator MTD Infraperdana Bhd has proposed a capital repayment worth nearly RM400 million to improve the company's capital structure and reword shareholders.

The capital repayment is via a cash distribution of 35 sen per share to its shareholders, or at least RM386.86 million in total.

It will also involve the reduction of its share's par value from 60 sen to 25 sen each.

The firm told Bursa Malaysia yesterday that its capital base is overly funded by equity capital, and it plans to increase the debt portion in its capital structure.

As at September 30 2006, MTD Infraperdana had about RM823.37 million in shareholders' fund and borrowings of RM524.92 million.

"Such composition of debt-to-equity funding is below the industry norm," said the firm.

"This (the capital repayment exercise) will enable us to fund our operations via a more efficient capital structure. In addition, we also expect it to improve our return-on-equity ratio in the long run," the company said in a statement.

MTD Infraperdana will fund the proposed capital repayment via borrowings. The entire exercise is expected to be completed in nine months.

"Although the gearing level will increase after the exercise, it will be adequately matched by our cash flow generation capabilities and such level of gearing is in line with other infrastructure companies in Malaysia," it said.

MTD Infraperdana expects its financial position to remain strong and is confident that it will be able to meet all its operating requirement and financial obligations.

The proposal is pending authorities and shareholders approvals.

MTD Infraperdana's shares rose as high as 4.69 per cent, or 6 sen, to RM1.34 yesterday. They closed 1 sen higher at RM1.29 with more than 3.2 million shares changed hands.

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