Affect the reputation of the cost of the huge North-South Road will not be acquired or privatized

In view of the huge costs involved, analysts believe that North-South Road (PLUS, 5052, Bhd) has been acquired or privatization plan is to not happen at the same time, this will also undermine the prestige of Malaysian toll road, for closed Fee Avenue company.

At the same time, private companies can not buy the country's road company, because just the North-South Road, (PLUS, 5052, Bhd) in market capitalization over 20 billion ringgit, while the rest of the road bonds issued by companies more than 26 billion ringgit .

The media reported that Asas Serba private limited plans to buy a domestic 22 Avenue, CIMB-GK Research analyst expressed a negative surprise, and pointed out that in view of the acquisition of this into a huge, financing is the most important obstacle to the transaction.

Analysts said that, assuming that private companies interested in acquiring the North-South Road, the acquirer would have to face a huge cost, simply on the basis of the market value of the North-South Road, more than 10 billion ringgit, coupled with the acquisition of its road, worth over 20 billion ringgit.

In addition, private companies acquired 22 Avenue franchise is also unlikely, because the buyers need to take into account the issue of bonds (worth over 26 billion ringgit), which will increase its acquisition costs.

As for the plans to the state of North-South Road, the analysts pointed out that this initiative will be the first to block the privatization of toll road companies.

However, analysts said that in this case, the government nationalized the nation's largest toll road franchise, not to be bullish investors or bond holders, and this move will affect the Malaysian toll road franchise, reputation.

However, analysts pointed out that, whether private companies or government acquisition of the North-South Road, will cause instability of the stock options, as during the acquisition negotiations often take a longer time, so the maintenance of the North-South Road, the "neutral" rating, target price of 3.55 ringgit.