Kumpulan Perangsang looking for more assets
> However, company still in the dark over discussions between federal and Selangor governments on Splash
SHAH ALAM: Kumpulan Perangsang Selangor Bhd (KPS), which is still awaiting word on the disposal of its 30% stake in Syarikat Pengeluar Air Selangor Sdn Bhd (Splash), will continue its acquisition trail next year.
Since the disposal of its water asset Konsortium Abbas Sdn Bhd to the Selangor government for RM78.054 million late last year, KPS has been undertaking several acquisitions.
“For 2016, we’ve achieved our target, now we’re looking at 2017. We’ve started our budget process, we should be finalising it in December.
“By then we should know the acquisitions that we’re looking for,” KPS chairman Raja Datuk Idris Raja Kamarudin told reporters after the group’s EGM here yesterday.
He said its planned acquisitions will not be industry specific.
As at June 30, 2016, KPS’s cash and cash equivalents stood at RM44.4 million.
Its recent deals included the acquisition of a 60% stake in the licence holder of the King Koil mattress brand for US$28.8 million (RM116 million). It also acquired a 51% in chemicals trading firm Aqua-Flo Sdn Bhd for RM7.5 million and bought a 51% equity interest in Smartpipe Technology Sdn Bhd, which is involved in the water pipe replacement business, for RM5.1 million.
Following that, KPS shareholders yesterday approved the proposed acquisition of a 71.44% stake in Century Bond Bhd for RM150.03 million or RM1.75 per share.
“We see good contribution from Century Bond because they’re one of the market leaders in this business and they’re moving regionally, into Thailand, Singapore and Indonesia,” Idris noted.
He expects Century Bond to contribute as high as 25% to KPS’s total revenue next year. For the first quarter ended June 30, 2016, Century Bond reported a 17.1% rise in net profit to RM3.6 million from RM3.07 million in the previous corresponding period.
KPS is required to undertake a mandatory general offer for the remaining Century Bond shares that it does not own at the same offer price of RM1.75 apiece. KPS does not intend to maintain the listing status of Century Bond.
As an investment holding company, Idris said, KPS will bring in expertise for Century Bond’s daily operations.
“We bring in expertise, whether they’re individuals, companies or consultants, to help us out because we’re very small, just an investment holding company, so we don’t pretend to have the expertise in all the different areas.”
On the water restructuring issue, Idris said they are still in the dark some weeks after the timeline given for the renegotiation of the master agreement between the Selangor and federal governments lapsed on Oct 7.
“It was supposed to be on Oct 7. After that we don’t know what happens. It has been very quiet, nothing from the state and federal governments. We’re not in a controlling position in Splash, so it’s really up to them to negotiate. We’ve not heard of the new deadline,” he said.
KPS agreed to sell its 30% stake in Splash in 2015, but the deal is dependent on Gamuda’s go-ahead. There has been no indication that Gamuda, which holds a 40% stake in Splash, will accept the offer as Gamuda has consistently reiterated that it will result in a divestment loss of RM920 million.
Commenting on KPS’s 20% stake in Sprint Highway, Idris said the group does not plan to sell it for the time being. “We wanted to exit, but with the tariff increase, now it is starting to turn the corner, so why should we sell it?”
Idris says KPS has achieved its target for 2016