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THE UEM OFFER

THE UEM OFFER. Presented By: YBhg Dato’ Dr Ramli Mohamad United Engineers (Malaysia) Berhad www. uem world.com. 24 November 2000. RENONG GROUP’S DEBT RESTRUCTURING. Investors. RM6.96 bn PLUS Bonds. RM6.96 bn cash. PLUS. RM2.96 bn UEM Bonds & UEM pledges assets. RM1.07 bn PLUS Bonds.

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THE UEM OFFER

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  1. THE UEM OFFER Presented By: YBhg Dato’ Dr Ramli Mohamad UnitedEngineers (Malaysia) Berhad www.uemworld.com 24 November 2000

  2. RENONG GROUP’S DEBT RESTRUCTURING Investors RM6.96 bn PLUS Bonds RM6.96 bn cash PLUS RM2.96 bn UEM Bonds & UEM pledges assets RM1.07 bn PLUS Bonds RM1.07 bn “A” RCCPS RM4.38 bn Renong SPV Bonds RM4 bn cash & RM0.38 bn PLUS Bonds RM4 bn cash & RM1.45 bn PLUS Bonds RM2.96 bn cash Renong Renong’s creditors UEM’s creditors Renong SPV UEM RM4 bn cash & RM0.38 bn PLUS Bonds RM2.96 bn debts RM5.45 bn debts Note: UEM: RM3.4bil as at 31/12/00 Renong: RM4.86bil as at 31/12/00 Renong guarantees & pledges assets

  3. UEM is not taking over the debt nor assets  UEM is taking over the Renong SPV that issued a bond to PLUS and pledged Renong’s assets. • The debt is already in UEM’s books since 1999. • This is really a cleaning-up operation by UEM to mitigate future risks.

  4. Main factors affecting PLUS valuation:  Debt level  Interest rates  Cash flow exposure  Traffic volume  Toll rates  Discount factor  Taxation

  5. The current situation is weighing down PLUS, making it difficult to refinance because of the risks to PLUS’s future cashflow. • PLUS listing at a good valuation is difficult unless the bonds are redeemed. • PLUS’s valuation is now depressed because of its exposure. • If bonds are redeemed, PLUS’s project debt can be refinanced, and PLUS’s valuation will be much higher and an IPO will be much easier. • Refinancing is easier if assets are in our control.

  6. The companies to be acquired will be practically debt-free or would have had their debts restructured by the time the transaction is completed.

  7. UEM will be in control of the disposal.

  8. The whole transaction requires SC approval. Pricing of shares will be judged by SC. • The UEM board wants to see no dilution in earnings and NTA per share. • The whole transaction requires shareholder’ approval at an EGM where only the minorities can vote. Renong has to abstain at UEM’s EGM and UEM has to abstain at Renong’s EGM. • Minority shareholders will have independent advice.

  9. What if we just left things alone, and not do this? Disposal of assets by Renong may not coincide with UEM’s needs.  PLUS cannot be listed, preventing UEM from realizing the true value of PLUS and preventing UEM from getting PLUS IPO proceeds to settle its debts. The PLUS bonds will be carried to maturity, making the problem much bigger in 2006. UEM cannot remove the shackle of the PLUS bonds that is dragging it down and making further growth extremely difficult.

  10. THANK YOU

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