PLUS MALAYSIA BERHAD17 MAY 2016

SUKUK FOR INFRASTRUCTURE – MALAYSIA EXPERIENCE

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G r o u p o fC o m p a n i e s

Companies / shareholding as at 31 December 2014

Listed on Bursa/NZX

100%

100%

100% 66%

51%

PLUS Malaysia Berhad

PLUS Expressways International Berhad

100%

70%

International

Consultants

100%

EXPRESSWAYSTOWNSHIP &

PROPERTY DEVELOPMENT

ENGINEERING & CONSTRUCTION

ASSET & FACILITY MANAGEMENT

100%

61%

Khazanah NasionalBerhad is the MalaysianGovernment’sinvestment fund. It hasinvestments in over 50major companies inMalaysia and abroad.

PROPEL

20%

PLUS Helicopter Services

PLUS Helicopter Services

Touch ‘n Go

Touch ‘n Go

Teras Teknologi

Teras Teknologi

100%

49% 51%

PLUS Malaysia Berhad

5 Highway Concessions

Projek LebuhrayaUsahasama Berhad

100%

CORPORATE STRUCTURE OF PLUS

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Lebuhraya Pantai Timur 2

100%

Ministry of Finance(1 Special Rights

Redeemable Preferences Share)

PLUS

Northern region(6 sections)

Central region(6 sections)

KL International

Airport

Southern region(5 sections)

ELITE

BKE

LINKEDUA

PB

LARGEST TOLL EXPRESSWAY OPERATOR IN SOUTH EAST ASIA & ONE OF THE RENOWNED TOLL ROAD PLAYER GLOBALLY

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Highways under PLUS LENGTH

PLUS North-South Expressway 846 km

ELITE NSE Central Link 63 km

LINKEDUA Malaysia-Singapore Second Crossing

47 km

BKE Butterworth-Kulim Expressway 17 km

PB Penang Bridge 13.5 km

LPT 2 Lebuhraya Pantai Timur 2 184 km

Total 1,170.5 km

PLUS started toll road operation in 1988 with more than 20 years of experience Backbone of Malaysian road transport system:

Connects major industrial, commercial & transportation centresLinks major seaports and airports

States serviced by the NSE make up 81% of population and 89% of GDP in Peninsular Malaysia

LPT2

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PLUS’ Financing Map

Highway Concession awarded by the Government

Refinancing via issuance of Islamic Bonds - BAIDs(in accordance with the Islamic finance concept of Bai’ Bithaman Ajil & comply to Malaysian Syariah)

Refinanced and converted to Sukuk

1988

1988-1998

2002-2005

Debt Refinancing & Restructuring (Issuance of PLUS Bonds, Redeemable Convertible Bonds)

2006 & onwards

Conventional Loans (Term Loan, Government support loan)

1999-2001

Migration from conventional loan to Shariah-compliant SUKUK

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Why SUKUK ?

Nature of SUKUK Transactions

Promote good business practice - avoid interest, uncertainties, over-leveraging and speculation, backed by real economic activities

Gaining prominence as an alternative source of funding for large scale &long-term infrastructure projects

Greater governance and transparency that promotes ethical and fairness

Investor Base Tapping wider investor base - Islamic and conventional investors;

Financing Cost Competitive pricing vis-à-vis bond – strong demand creates better pricing

Tax Incentive Special tax incentive in Malaysia to promote SUKUK

Sukuk for Infrastructure Financing

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PLUS Privatisation in 2011• In November 2011, PLUS was privatised at a total value of RM23.0 billion

following a joint-offer by UEM Group Berhad and the Employee Provident FundBoard (“EPF”).

• The key objective of the privatisation exercise was to rationalise the overall tollstructure of all the highway concessions in PLUS Group. It was a landmarkinitiative across all highways in Malaysia as PLUS Group owns about 60% of thetolled highways throughout the country.

• Based on the complexity and the high profile nature of the transaction, it waspertinent that the interest of various stakeholders were protected. Thestakeholders include highway users of Malaysia, bondholders of PLUS’s existingdebt securities, the shareholders as well as the Government of Malaysia.

Stakeholders Rationale

Bondholders and Shareholders The rights of the bondholders were protected.

Fair exit price for the existing shareholders.

Promoters (UEM Group & EPF) Acceptable return on investments.

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• As part of the privatisation, PLUS established the following Sukuk programme on 12January 2012:

• The highest AAA rating was accorded for the RM23.35 bil Sukuk by Malaysian RatingCorporation Berhad (MARC), reflecting the strong credit quality of the transaction andstrength of PLUS.

• Principal Adviser & Lead Arranger : CIMB Investment Bank Berhad• Joint Lead Managers - 4 local largest banks:

1. CIMB Investment Bank Berhad2. Aminvestment Bank Berhad3. Maybank Investment Bank Berhad4. RHB Investment Bank Berhad

A Landmark Sukuk Issuance

Sukuk ProgrammeNominal

Value(RM bil)

Amount issued on 12 Jan 2012

(RM bil)(i) Islamic Medium Term Notes (“Sukuk”) 23.35 19.60

(ii) Islamic MTN programme, irrevocably and unconditionally guaranteed by Government of Malaysia (GG Sukuk)

11.00 11.00

Total 34.35 30.60

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Significance of PLUS’ Deal• As at execution date (2011), the privatization transaction of PLUS at the value of

RM23.0 billion was the second largest M&A deal in corporate Malaysianhistory and the largest for single company.

• PLUS Group’s issuance also highlights the size and liquidity of the MalaysianDebt Capital Markets, as the Sukuk generated very robust interest taking intoconsideration the large size of the issuance as well as long tenure of up to 27years.

• The Sukuk issuance also represented many FIRSTS, including:the single largest bond issuance in Malaysia to date;the single largest Ringgit-denominated Sukuk issuance to date; andthe single largest Sukuk issuance globally (in any currency).

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Challenges & Considerations• A balanced and “win-win” solution for all stakeholders.

• Large size single issuance of approximate RM30.6 billion.

• Long financing tenure of up to 27 years, given that the concession agreement expires in year 2038

• Given the highly leveraged transaction structure, only the highest possible rating would enable PLUS to achieve an effective cost of financing as well as marketability of the Sukuk

Market and Stakeholders

• Risk of policy and regulatory changes

• Threats from upcoming and planned alternative toll roads

Operating Environment

• Ensure proper management and implementation of the transaction, considering the publicity:^ To minimise execution risk and delay in completing the exercise ^ Proper governance and transparency ^ Clear and proper management of news flow to the public at large

General

THANK YOU

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