HOW MANY times you want to delay????
Why want to politic the WATER issue???
Puncak Niaga may seek higher price for water assets
By Yen Ne Foo / The Edge Financial Daily | May 12, 2015 : 10:02 AM MYT
KUALA LUMPUR: Puncak Niaga Holdings Bhd ( Financial Dashboard) said there is a “high possibility” the water concession holder will ask for more than the RM1.56 billion it was promised for the disposal of its two assets to the Selangor government, as the May 11 deadline for the state’s water asset restructuring has passed, said Puncak Niaga managing director Tan Sri Rozali Ismail.
“Puncak Niaga is currently seeking its board of directors’ decision to consider a fifth extension of the stop date under the sale and purchase agreement (SPA).
“There is a high possibility that the board of directors of Puncak Niaga may ask for an increased offer price for the proposed disposals,” said Rozali, who is also the group’s executive chairman, in a statement yesterday.
Rozali said the reason why Puncak Niaga may ask for a higher price is because the basis of the offer price of RM1.56 billion — from Pengurusan Air Selangor Sdn Bhd under the SPA — was derived based on a 12% return on investment, calculated up to the financial year ended Dec 31, 2012 (FY12).
As such, he said the company had not been accorded any returns for FY13 and FY14, since the signing of the SPA between itself and Air Selangor.
Puncak Niaga (fundamental: 1.9; valuation: 2.1) and Air Selangor signed an SPA in November 2014, for the disposal of Puncak Niaga’s entire equity interest and cumulative convertible redeemable preference shares in Puncak Niaga (M) Sdn Bhd (PNSB).
It was also agreed that Air Selangor would purchase a 70% equity interest in Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) and RM212 million nominal value of redeemable convertible unsecured loan stocks. The two disposals would have earned Puncak Niaga RM1.56 billion.
The deal was supposed to be finalised on Jan 14, 2015. However, it has been extended four times, firstly to Feb 9, then March 9, April 9 and lastly, May 11.
Rozali said the latest May 11 deadline was not met because “Air Selangor is still not able to fulfill the conditions precedent in the SPA”.
He added that the long-drawn water asset restructuring exercise also means that Puncak Niaga has had to forego and lost several investment opportunities due to the delay and uncertainty of the restructuring exercise.
“In line with the consolidation/restructuring of the Selangor water industry, which is pending the completion of the SPA, which has been extended on a month-to-month basis since January 2015, PNSB and Syabas were directed to put on hold several critical and major improvement plans on the operations of the water treatment and water distribution systems.
“This has inadvertently caused unnecessary hardship to the consumers, leading to an unhealthy environment in Selangor, Kuala Lumpur and Putrajaya. It has taken too long for both the federal and state governments to resolve this restructuring,” he said.
“Since 2008 till now, over a period of seven years, PNSB and Syabas have not been able to implement many programmes to improve their services, as the instructions given by the authorities were to wait for the restructuring,” Rozali added.