Selangor govt gives Gamuda until Friday to accept offer for Splash

PETALING JAYA: Gamuda Bhd, which has maintained that Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) is worth more than RM2.8 billion minus its loans, has until Friday to revert to the Selangor state government on its RM2.55 billion offer for Splash.
The offer was made via Pengurusan Air Selangor Sdn Bhd (Air Selangor) to acquire the entire 50 million ordinary shares and 350 million redeemable unsecured loan stocks of Splash.
It represents a 39% jump from the last offer for Splash of RM1.83 billion made under former Selangor mentri besar Tan Sri Khalid Ibrahim. The offer however falls short of Gamuda’s reported expectations of an at least RM2.8 billion price tag. Splash loans, as stated in January 2015, stood at RM1.56 billion.
Splash is a wholly owned subsidiary of Syarikat Pengeluar Air Selangor Holdings Bhd (Splash Holdings), in which Gamuda has 40% interest, while Kumpulan Perangsang Selangor Bhd (KPS) and The Sweet Water Alliance Sdn Bhd own 30% each.
The sale and purchase of Splash will be transacted through a share purchase agreement (SPA) between Air Selangor and Splash Holdings, and the SPA shall be entered into by Sept 14 at the latest.
If the deal is accepted, the purchase consideration will be satisfied with an upfront payment of RM1.9 billion on the completion date of the SPA while the balance purchase price of RM650 million will be settled in nine annual instalments.
Gamuda said in a filing with Bursa Malaysia that it will make the appropriate announcement in due course after going through due process internally and discussions with Splash Holdings.
In a separate filing, KPS said that the proposed acquisition by Air Selangor is a step closer to the resolution of Selangor’s water sector restructuring and a closure for KPS.
“This corporate development is certainly not all loss to the group, as we can now be fully focused in executing our business transformation plan to unlock the full potential of our core businesses, thus, creating long-term value and generating sustainable returns for the group,” said its CEO Ahmad Fariz Hassan.
Splash is the last pending water asset under the Selangor water restructuring exercise. Puncak Niaga Sdn Bhd, Syarikat Bekalan Air Selangor Sdn Bhd and Konsortium Abbas Sdn Bhd sold their water assets for RM2.47 billion, RM3.11 billion and RM990 million, respectively.
KPS agreed to sell its 30% stake in Splash in 2015, but both Gamuda and Tan Sri Wan Azmi Wan Hamzah-controlled The Sweet Water Alliance balked at the deal, which led to the impasse of more than two and a half years.