Selangor to acquire Splash

State offers RM2.55bil to take control of water supply

PETALING JAYA: The 10-year Selangor water saga is coming to an end with the likely acquisition of Syarikat Pengeluaran Air Selangor Sdn Bhd (Splash) by Pengurusan Air Selangor Sdn Bhd for RM2.55bil.

The plan is for Air Selangor to make an upfront payment of RM1.9bil, while the remaining RM650mil will be paid over a nine-year period.

Selangor Mentri Besar Amirudin Shari, who announced the offer yesterday, said all water concessions in the state would be consolidated by the year-end if Splash accepts the offer.

“Hopefully, in 2019, Air Selangor will be the sole company to process, treat and distribute treated water to consumers in Selangor and Putrajaya. This restructuring exercise will ensure better water distribution.

“This will allow Air Selangor to run at a reasonable operational cost which will in turn, ensure that water tariffs will no longer burden the people,” he told reporters after witnessing the handing over of the offer letter from Air Selangor CEO Suhaimi Kamaralzaman to Syarikat Pengeluar Air Selangor Holdings Bhd (Splash Holdings) chairman Tan Sri Wan Azmi Wan Hamzah.

Splash Holdings is the parent company of Splash, holding a 100% equity in the company.

Describing it as a historical moment for both the state government and the Selangor folk, Amirudin said a solution for the water issue was at hand.

He said as of now, there was no decision to raise water tariffs. He said the agreed figure of RM2.55bil was at a rate of around 0.7 to Splash’s nett book value ( NBV) or with a discount of around 28%. On June 30, the NBV of Splash was RM3.54bil.

“This acquisition will also resolve the outstanding debts due by Air Selangor’s subsidiary Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) to Splash for the purchase of treated water. The figure stood at RM4.7bil as at June 30.

“We hope that this will be a good start to boost the state’s economy. An efficient water supply will definitely be welcomed by the rakyat and the business community,” Amirudin said.

He said the quantum of payment from the federal and state governments (to Air Selangor) would be declared after the Federal Government gives the go ahead.

Amirudin said as far as the state is concerned, Air Selangor has the responsibility to ensure the state has enough funding to pay the RM2.55bil.

Air Selangor is the state’s special purpose vehicle to acquire all water supply concession companies in Selangor, Kuala Lumpur and Putrajaya.

In 2015, Air Selangor took over Syabas, Puncak Niaga Sdn Bhd, and Konsortium ABASS.

Meanwhile, Suhaimi said the share purchase agreement is expected to be inked in another month and a half.

“More details will be worked out in the next one-and-a-half month with regards to the consideration and the payment.

“This offer is the result of a year’s worth of discussion and it is agreed in principle by Splash Holdings.

“They will have to go through their board, shareholders and others, and after they agree officially, we will discuss the share purchase agreement,” Suhaimi said, adding that it will be purely a cash deal.

Wan Azmi said the deal is “well short” of what it was set out to do, largely because of the final discount Splash Holdings had to concede.

“However, it is a concession that we do not begrudge too much because this is a time where everybody, including the corporate sector, has been called to put their shoulders to the wheel to rebuild the nation,” he said.