MRCB's share price fall on anticipation of neutral impact from compensation

PETALING JAYA: Malaysian Resources Corp Bhd (MRCB), which is expected to receive compensation for the abolishment of toll collection on the Eastern Dispersal Link (EDL), saw its share price fall 0.94% this morning.
At 10.38am, its share price was 0.94% or 1 sen lower at RM1.06 with a total of 2.46 million shares traded.
According to KAF Research, the compensation will have a neutral impact on MRCB’s net present value and may even reignite MRCB’s divestment plans for EDL.
KAF Research said in its report that the EDL concession (net of debt) contributes about 1 sen or less than 1% of group net asset value. Note that the EDL has been a drag on MRCB’s earnings and constitutes about 30% of its total debt as of June 30, 2017.
The EDL is one of the four locations involved in the abolishment of toll collection announced under Budget 2018. MRCB is expected to be compensated for the loss of toll revenue once tolling is scrapped from Jan 1, 2018.