Selangor investment arm hopeful of water deal by year-end

by **Cals** Thu 26 Sep 2013, 17:28

Published: Thursday September 26, 2013 MYT 12:00:00 AM
Updated: Thursday September 26, 2013 MYT 10:34:36 AM
Selangor investment arm hopeful of water deal by year-end
BY DANIEL KHOO
[You must be registered and logged in to see this link.]
[You must be registered and logged in to see this image.]
SHAH ALAM: Kumpulan Darul Ehsan Bhd (KDEB), Selangor’s investment arm, is hopeful of a resolution to the water stalemate by year-end.
KDEB president Suhaimi Kamaralzaman (pic) said in an interview yesterday that it would step in to make a new offer when both the federal and state governments come to an agreement on the structure and framework for the resolution of the matter.
Suhaimi said any new attempts to take over the water assets of Selangor would likely be priced the same as its previous offer, amounting to RM9.65bil in total.
This calculation is fundamentally based on the 12% return-on-equity component, while liabilities would be parked under Pengurusan Aset Air Bhd (PAAB), with the operations being thereafter managed by the state’s special purpose vehicle.
“Basically, we have looked at the accounts (of the companies involved), calculated how much shareholders have invested and then come up with the 12% figure on a non-compounding basis. This figure is close to RM2bil,” Suhaimi said.
“The 12% is fixed, as we believe it to be the true and fair offer. However, it is also subject to valuations or the reasonableness of the interpretation by the international arbitrators,” he added.
The water assets, which were equivalent to the liabilities to be assumed, were worth RM7.6bil, which include Government loans, bonds, etc, that would be assumed by PAAB in the restructuring, he said.
“PAAB has maintained its stand to take over the water assets equivalent to the liabilities. The RM7.6bil figure, which is not finalised yet, would eventually be solved via a proper due diligence process,” Suhaimi explained.
Further, KDEB said the better climate this time around between both governments might be a catalyst for the issue to be resolved once and for all to ensure the industry’s sustainability, moving forward.
The Selangor government had in February made an unsuccessful offer to acquire the state’s water assets for RM9.65bil, with its liabilities to be taken over via KDEB’s special purpose vehicle then.