KUALA LUMPUR: The end of a 10-year impasse over Selangor water restructuring has been lauded as a big win for shareholders of Syarikat Pengeluar Air Selangor Sdn Bhd (Splash), analysts said.
They said Splash shareholders particularly Gamuda Bhd and Kumpulan Peransang Selangor Bhd (KPS) can expect a windfall from the RM2.55 billion Splash takeover by Pengurusan Air Selangor Sdn Bhd (Air Selangor).
The RM2.55 billion was a 28 per cent discount over Splash’s net book value of RM3.54 billion as of June 30 this year, according to Selangor Menteri Besar Amirudin Shari.
Over at Bursa Malaysia, shares of water pipe manufacturers rose after Air Selangor tabled the offer to Splash chairman Tan Sri Wan Azmi Wan Hamzah yesterday.
Engtex Group Bhd, YLI Holdings Bhd, Hiap Teck Venture Bhd and Fitters Diversified Bhd were among the stocks that gained.
Water treatment services provider Taliworks Corp Bhd was also gained, rising four sen or 3.17 per cent to close at RM1.30. Taliworks is owed some RM638 million in receivables by Splash.
KPS and Gamuda, which own 30 per cent and 40 per cent respectively of Splash, were suspended ahead of the big announcement.
The remaining 30 per cent Splash stake is held by Sweet Water SPV Bhd.
An analyst said the finalisation of the long-drawn issue was not just a win for the shareholders, but also for the people of Selangor.
“For 10 years now, Selangorians have suffered multiple water shortages as a result of this exercise being drawn out, not because of necessity, but because of political reasons,” he said.
“Now that Pakatan Harapan government has taken over, this issue is finally fixed. Splash shareholders should expect a windfall. We expect to see the positive vibe reflected in their shares comes Monday, after the market has digested it.”
Another analyst said apart from a RM1.9 billion immediate payment, it was financially sound for all three shareholders to receive the remainder RM650 million over nine years.
“The fact that the payment is drawn out over the next nine years means that to a certain extend, all the shareholders will have recurring income. In the case of Gamuda, this would translate well to its bottomline.”
Meanwhile, KPS chief executive officer Ahmad Fariz Hassan said the proposed takeover was a step closer to not only the resolution of the water sector restructuring in the state, but also a closure for the company.
“This corporate development is certainly not all loss to the group, as we can now be fully focused in executing our Business Transformation Plan and Value Creation Plans to unlock the full potential of our core businesses, thus, creating long-term value and generating sustainable returns for the group,” he said in a statement.