Liew: PNB-S P Setia management agreement win-win situation

KUALA LUMPUR: Amid a takeover offer from its largest shareholder
Permodalan Nasional Bhd (PNB), S P Setia president and CEO Tan Sri Liew
Kee Sin has assured shareholders that the proposed management agreement
between PNB and the property developer will bode well for all
stakeholders.

“It is an agreement that will be a win-win for
everybody; for S P Setia, for myself, everybody will be happy with this
management agreement,” Liew told a press conference yesterday after
announcing the group’s latest financial results.

While remaining
tightlipped on specifics, Liew pre-empted questions from reporters by
stressing that the ball is now in the Securities Commission’s (SC) court
after the parties had ironed out the agreement over the last six weeks
since PNB launched the takeover bid of S P Setia in late September.

After deliberations, the SC could reject, accept or amend portions of the management agreement.

Last
Friday, PNB submitted a proposal to the SC to formalise incentives and
management rights relating to the business of S P Setia.

Liew
confirmed The Edge weekly’s report on Nov 29 that the management
agreement would include an incentive package provided that S P Setia
achieve specific milestones.

“The agreement is quite
comprehensive. All the answers are inside the agreement. But take it
from me, if this agreement can be implemented it is good for everybody.

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Liew: Everybody will be happy.

“This is the first time an institutional fund is having a controlling
stake in a company and yet allow entrepreneurs like ourselves to
continue running it and to create value. I think it’s a good thing.”

On
the key question of how long he will remain at S P Setia’s helm, Liew
quipped, “Wait until this agreement is out. But there are lots of good
people in Malaysia. We are not the only ones who can do the job.”

Liew
announced yesterday that S P Setia is targeting RM4 billion in sales in
2012 despite concerns of a weaker economic environment and the central
bank’s recent prudent lending guidelines for housing mortgages.

“Look
at our portfolio. We are a development supermarket [with products
ranging] from low-cost units to RM10 million villas. We think whichever
way the market swings, we are able to cater to that segment of the
market,” Liew said.

S P Setia said it had achieved a fourth
consecutive year of record sales after posting full-year sales of RM3.29
billion for FY11, a 42% increase from the previous high of RM2.31
billion for FY10.

The property developer said its net profit for
4QFY11 ended Oct 31, grew 9.73% to RM82.46 million from RM75.15 million a
year ago.

Pre-tax profit rose 7.57% to RM109.04 million from
RM101.37 million while revenue climbed 13.5% to RM633.36 million from
RM557.99 million a year ago.

For the 12-month period, S P Setia’s
net profit rose 30.24% to RM327.97 million from RM251.81 million, while
revenue grew 27.87% to RM2.23 billion from RM1.74 billion a year ago.

Liew
said S P Setia is still keen to acquire assets in London and could
re-evaluate proposals to acquire the Battersea Power Station in south
London when the project is open for tender.

S P Setia recently
lost its bid to acquire the asset after lenders to the Battersea Power
Station development rejected the former’s preliminary offer to take over
the debts amounting to £300 million (RM1.48 billion).

“We are definitely interested but subject to the terms in the tender. London is a very interesting market,” Liew said.