What happens to Keuro's rights?

Some whom have invested into Keuro would definitely be asking what happened to Keuro's rights as the group has announced of the proposal since August 2013 and almost 1 year since, the rights does not seem to be able to get off the ground.

The rights raised from Keuro was supposed to partially fund the West Coast Expressway (WCE) project, a RM5 billion project and with it having little cash in its coffers, how would the WCE kick off?

From some background, we know of the following:

- Keuro does not have the financial background to fund the project as it involves a large amount of loans to be able to kickstart the project;
- IJM is a substantial shareholder and it seems that it is taking the lead. The announcement made on 20 May 2014 seems to tell us that. If we read between the lines of the 3rd paragraph of the announcement, it seems that the portion where it will costs RM2.828 billion, IJM may be required to fund the project (at least for the initial stage until Keuro is able to raise the required funding). Remember that the government is supposed to provide a soft loan of RM2.2 billion with interest rate of 4% capitalised annually. With that, the funding of the projects are taken care of and as a result of this, the raising of funds through the rights may not be needed until later;

Announcement made by Keuro on 20 May 2014

- Furthermore, if we look through the latest balance sheet of Keuro, it has around RM94 million cash, mainly raised through the sale of 10% of Radiant Pillar Sdn Bhd (Bandar Rimbayu township owner) and private placements made late last year, the group may not need the fund for the project as at now. Remember, I was being critical of the sale price of Radiant Pillar, and this is the reason why it probably was sold so cheap - IJM funding the project almost entirely!

Over time, profits and dividends generated from the Bandar Rimbayu project and a better and more sustainable balance sheet may allow it to better negotiate the funding it needs for the WCE project. That being the case, we may not see the rights raised until then as its partners i.e. government loan and IJM would be able to support those projects.