Boustead and LTAT taking over AES ops

By THE STAR | 7 March 2015

KUALA LUMPUR: Conglomerate Boustead Holdings Bhd and Lembaga Tabung Angkatan Tentera (LTAT) are taking over the controversial automated traffic enforcement system (AES) operations in Malaysia by acquiring a 50% stake in Irat Properties Sdn Bhd.

In a filing with Bursa Malaysia, Boustead said the RM127.8mil deal would see it subscribing 60 million new shares at the issue price of RM2.13 in Irat Properties, joining its parent LTAT and Irat Holdings Sdn Bhd.

Boustead said LTAT was also subscribing 550,000 redeemable convertible preference shares (RCPS) of 1 sen par value each in Irat at the issue price of RM100 per RCPS for RM55.5mil.

With the subscription, Boustead will have a 50% stake, followed by LTAT 49.17% and Irat Holdings 0.83%, respectively.

Deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin said the proposed acquisition was set to build Boustead’s diversified portfolio in property investments.

“This is part of our strategic thrust to strengthen our property division and improve the group’s earnings potential.

“For the financial year ended Dec 31, 2014, (FY14) the property division delivered the highest contribution to the group, with a profit of RM295mil and turnover of RM652mil,” Lodin said, adding that the acquisition of these new properties would bring synergies to the group and further add value.

He said as testament to the effectiveness of AES, studies conducted by the Malaysian Institute of Road Safety Research (Miros) showed a decay rate in accident-prone areas where AES was installed, demonstrating a drop in fatal accidents and lower summons volumes.

On Feb 27, Irat Properties entered into a sale and purchase agreement to acquire 100% interest in ATES Sdn Bhd and Beta Tegap Sdn Bhd, the two concessionaires hired to undertake the operations of AES.

The concessionaires inked a deal in 2012 with the Government to establish and operate and maintain AES equipment and systems to be handed over to the Road Transport Department on a five-year concession period.

However, the RM700mil AES project targeted to track traffic offenders, was a failure due to concerns from the public. Out of the planned 404 cameras that were supposed to be rolled out, only seven were operational as of February.

Established in 2009, ATES’s unaudited consolidated financial statement for FY 2014 revealed that it recorded a loss after tax of RM20.61mil, while its consolidated net liabilities was RM47.12mil. The concessionaire was hired to undertake the AES operations in Perlis, Kedah, Penang, Perak, Kelantan, Sarawak, Sabah and Labuan.

Meanwhile, Beta Tegap, who was engaged to undertake the operations in Kuala Lumpur, Putrajaya, Selangor, Negri Sembilan, Malacca, Johor, Pahang and Terengganu recorded a loss after tax of RM22.58mil, while its consolidated net liabilities as at June 30, 2014 stood at RM32.80mil.