Selangor govt offers RM2.8b to buy water assets

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SELAAPETALING JAYA -The Selangor state government through its wholly owned investment arm, Kumpulan Darul Ehsan Bhd (KDEB), has offered RM2.82 billion to buy water concessionaires Syarikat Pengeluar Air Selangor Holdings Bhd (Splash) and Titisan Modal Sdn Bhd (TMSB).

In a filing to Bursa Malaysia yesterday, Kumpulan Perangsang Selangor Bhd (KPS), which controls a 30% stake in Splash and 90.8% of TMSB, said KDEB will pay RM1.83 billion for Splash and RM990 million for TMSB, which in turn owns Konsortium Abass Sdn Bhd (KASB) that has a 30-year concession to privatise the Sungai Semenyih Water Supply Scheme starting 2001.

The offers are based on a return on equity of 12% per annum while the water assets will be acquired concurrently by federal government controlled vehicle Pengurusan Aset Air Bhd. Deadline for both the offers is Dec 4, 2013.

Earlier this month, Selangor menteri besar Abdul Khalid Ibrahim said the state government will offer RM9.65 billion to take over all four concessionaires in the state — namely Splash, Puncak Niaga (M) Sdn Bhd, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) and KASB, as reported in FMT.

The state government has deemed interest of 30% in Syabas, the state’s water distribution company, while another 70% is controlled by Puncak Niaga Holdings Bhd, whose substantial shareholder is Tan Sri Rozali Ismail.

The state government wants to bring all water assets in the state under its administration under a restructuring exercise, and should all the offers get accepted, the exercise should be completed by mid-2014.