Deal to sell SPLASH to Selangor govt for RM2.55 bil

Air Selangor’s acquisition of SPLASH is part of the state and federal governments’ efforts to restructure the water industry in Selangor, Kuala Lumpur and Putrajaya.

KUALA LUMPUR: Syarikat Pengeluar Air Selangor Holdings Bhd (SPLASH Holdings) today entered into a conditional agreement to sell water treatment concessionaire Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) to the Selangor government for RM2.55 billion.

SPLASH Holdings is owned by Gamuda Bhd (40%), Kumpulan Perangsang Selangor Bhd (KPS) (30%) and Sweet Water SPV Sdn Bhd (30%), a private vehicle of businessman Wan Azmi Wan Hamzah.

In filings with Bursa Malaysia, Gamuda and KPS said SPLASH Holdings would sell its 100% equity interest in SPLASH as well as all of its redeemable unsecured loan stocks in the concessionaire to Pengurusan Air Selangor Sdn Bhd (Air Selangor).

Air Selangor is owned by the Selangor government’s investment arm Kumpulan Darul Ehsan Bhd (KDEB).

Air Selangor will pay RM1.9 billion upfront and the balance in nine annual instalments.

The disposal is expected to be completed by year-end, subject to the fulfilment of conditions.

KPS, which is majority-owned by KDEB, stood to receive RM765 million in gross proceeds for its stake in SPLASH Holdings, the company said in a press statement.

“The group is estimated to recognise RM331.6 million as a one-off loss on disposal.

“This is expected to have a significant impact on the group’s net assets and earnings for the financial year ending Dec 31, 2018,” it added.

KPS CEO Ahmad Fariz Hassan said the conclusion of its involvement in SPLASH was part of its efforts to grow its core businesses into industry powerhouses and generate sustainable returns for shareholders.

“The group will adopt a prudent approach in balancing current needs and future growth in utilising the proceeds,” he added.

Meanwhile, Gamuda said the proposed disposal would enable it to monetise its investment in SPLASH and focus on its core business.

Air Selangor’s acquisition of SPLASH is part of the state and federal governments’ efforts to consolidate and restructure the water industry in Selangor, Kuala Lumpur and Putrajaya.

This was done to increase water reserve margins and reduce non-revenue water, and get a step closer to achieving uninterrupted water supply within the Klang Valley and nationwide.