THE Selangor government is paying RM2.55 billion to take over Syarikat Pengeluar Air Selangor (Splash) under a plan to restructure the state’s water assets.
Selangor Menteri Besar Amirudin Shari said the price was a 28% reduction from Splash’s net book value.
“The takeover value of Splash is RM2.55billion, which is equivalent to a 28% discount on the net book value of RM3.54 billion,” he said, after witnessing the handover of the letter of offer.
The Splash acquisition is the final step of the state government’s water assets restructuring exercise that has seen it take over Syarikat Bekalan Air Selangor Sdn Bhd, Puncak Niaga Sdn Bhd and Konsortium Abass Sdn Bhd.
Air Selangor chief executive officer Suhaimi Kamarulzaman said the deal was expected to be finalised in six weeks.
“This is the letter of offer, more details will be worked out in the next month or so, terms of payment and all that,” he said.
Amirudin said the payment would be made over a period of nine years, but declined to say if the federal government was involved.
“We have a timeframe of nine years but the quantum we can’t disclose now. There needs to be certain approval, the method, from the federal government we cannot disclose now,” he said.
Selangor will pay RM1.9 billion upfront and the balance of RM650 million in stages over a period of nine years.
Amirudin said the funds would not come from Selangor’s budget.
Splash chairman Wan Azmi Wan Hamzah said the 28% discount was given to the state in the “spirit of the times”.
Former prime minister Najib Razak had previously accused the Selangor government of colluding with Splash to purchase the water company for RM2.7 billion, with a top management official who has a 30% stake in Splash to benefit handsomely from the deal.
Singapore Straits Times had reported that Putrajaya and Selangor had struck a joint funding deal for the buyout, with the federal government to make the upfront payment and the state government to fork out between RM600 million and RM800 million.
Water, Land and Natural Resources Minister Dr Xavier Jayakumar denied the report suggesting the federal government was paying RM1.9 billion for Splash. – MALAY MAIL
Will Gamuda accept Air Selangor’s offer?
PETALING JAYA: Following a RM2.55 billion offer from the Selangor government to acquire Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash), it remains to be seen whether Gamuda Bhd, which previously indicated a higher valuation, would accept the offer.
Gamuda has previously said that Splash should be worth more than RM2.8 billion.
Today, Pengurusan Air Selangor Sdn Bhd (Air Selangor) offered to acquire the entire 50 million ordinary shares and 350 million redeemable unsecured loan stocks (RULS) of Splash for a total purchase consideration of RM2.55 billion.
Splash is a wholly-owned subsidiary of Syarikat Pengeluar Air Selangor Holdings Bhd (Splash Holdings), in which Gamuda has 40% interest, while Kumpulan Perangsang Selangor Bhd (KPS) and The Sweet Water Alliance Sdn Bhd own 30% each.
Splash Holdings is to revert with acceptance of the offer by 5pm on or before Aug 10, 2018. The sale and purchase of Splash will be transacted through a share purchase agreement (SPA) between Air Selangor and Splash Holdings, and the SPA shall be entered into by Sept 14, 2018 at the latest.
If the deal is accepted, the purchase consideration will be satisfied with an upfront payment of RM1.9 billion on the completion date of the SPA while the balance purchase price of RM650 million will be settled in nine annual instalments.
Gamuda said in a filing with Bursa Malaysia that it will make the appropriate announcement in due course after going through due process internally and with Splash Holdings.
In a separate filing, KPS said that the proposed acquisition by Air Selangor is a step closer to the resolution of Selangor’s water sector restructuring and a closure for KPS.
“This corporate development is certainly not all loss to the group, as we can now be fully focused in executing our business transformation plan to unlock the full potential of our core businesses, thus, creating long-term value and generating sustainable returns for the group,” said its CEO Ahmad Fariz Hassan.
Splash is the last pending water asset under the Selangor water restructuring exercise. Puncak Niaga Sdn Bhd (PNSB), Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) and Konsortium Abbas Sdn Bhd (Abbas) sold their water assets for RM2.47 billion, RM3.11 billion and RM990 million, respectively.
KPS agreed to sell its 30% stake in Splash in 2015, but the deal is dependent on Gamuda’s go-ahead. There has been no indication that Gamuda will accept the offer as it has consistently reiterated that it will result in a divestment loss of RM920 million.
Meanwhile, The Sweet Water Alliance Sdn Bhd, controlled by businessman Tan Sri Wan Azmi Wan Hamzah, has rejected the offer for its 30% interest in Splash. It is not known if he has changed his mind since.
Trading in Gamuda and KPS was suspended today pending the material announcement. -THE SUN DAILY
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