Water sector restructuring deal a re-rating catalyst for Taliworks

KUCHING: The impending settlement of the Selangor water restructuring deal involving Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH) could be a re-rating catalyst for Taliworks Corporation Bhd (Taliworks).

Following a company briefing, the research arm of Hong Leong Investment Bank Bhd (HLIB Research) in a report yesterday said it was confident that the Selangor water sector restructuring could be finalised by April.

An independent valuation of the water deal has been carried out to work out the value of SPLASH to the net book value.

It gathered that the valuation has been concluded last month prompting the company to believe the settlement will be happening soon.

Taliworks estimated the valuation of SPLASH to be approximately close to the net book value of RM2.8 billion.

As such, the research firm noted post completion of the water sector restructuring deal, Taliworks has a high chance of recouping the trade receivable owed by SPLASH.

The research firm gathered that as at September 2016, Taliworks has trade receivables owed by SPLASH amounted to approximately RM471 million.

It also gathered that once Taliworks has recovered the amount of trade receivables from SPLASH, the company might reward shareholders through sustainable growth in dividend rather than any one-off special dividend.