Monday, February 23, 2009


Selangor state is damn rich. Therefore state government flashed billions of RM to entice Syabas. Yes, Syabas rejected the first move. I rather keep mum especially after the fiasco of Cows for Car! But Khalid's boys came out stronger with takeover seduction.

Eh, water is free as it fall leisurely from the sky, but once processing and packaging is completed it costs billions. Oh, water is posted through pipes! By the way, countries had gone to war to settle issues relating to water control. Not here, Africa .....

I save this for future reference:

Water concessionaires reject state government offer
by yvonne tan
feb 21 2009

AS anticipated, the Selangor water concessionaires have rejected the state government’s offer to buy over water assets in the state for some RM6bil.

Puncak Niaga Holdings Bhd and Gamuda Bhd issued separate statements to Bursa Malaysia yesterday to say that the offer is lower than they hoped.

Even state-controlled Kumpulan Perangsang Selangor Bhd (KPS) told the stock exchange its 55% controlled Konsortium Abass Sdn Bhd (Abass) has rejected the state’s offer.

KPS directors abstained from deliberating and making decisions on the matter in view of the state government’s interest in Kumpulan Darul Ehsan Bhd (KDEB), which owns 60% in KPS.

Gamuda says its 40% unit Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) “hoped the state would revert with a more reasonable offer and is prepared to re-negotiate towards achieving a package that is fairer to all parties.”

Puncak, meanwhile, says the offer is “unclear” on whether the state wants to acquire the company or assets of the company.

Under the initial restructuring plan, the Selangor government, via KDEB, would consolidate the concessions, after which it would hand over the water assets to Pengurusan Aset Air Bhd (PAAB), a wholly-owned unit of Minister of Finance Inc

The assets would then be leased back to KDEB as the sole concessionaire.

The Energy, Water and Communications Ministry had ordered the restructuring to be completed by end March.

Earlier this week, PAAB was reported to have “moved in” to negotiate directly with the water concessionaires in Selangor.

It is believed that PAAB’s offer to take over the state’s water assets could be as high as RM9bil. “We think that if PAAB indicates that it would extend a better offer which takes care of liabilities too, the concessionaires would say no to the state and go for federal-owned PAAB’s offer instead,” CIMB Research said on Thursday.

An official from the Water Review Panel of the Selangor government said yesterday that the state will be “more than agreeable” to a direct takeover of the assets by the Federal government if “they can negotiate a lower acquisition price that what we have offered to the concessionaires”.

To queries from StarBizWeek, she says: “Should the Federal government, however, decide to offer a price which is detrimental to the interests of consumers, while unjustifiably ‘compensating’ the concessionaires, the state will certainly object to the takeover. At the moment, we are not looking at tarriffs.”

“The Selangor government is steadfast in its position to safeguard the interests of the public against the private vested interests of the concessionaires,” she says.

Should the state government fail to hand over the water assets to PAAB by end-March, consumers could end up paying water tariff that is 37% higher.

Puncak Niaga was offered RM3.1bil for its water assets and operations as well as those of its 70% subsidiary Syabas without assuming any liabilities.

Gamuda unit Splash was offered RM2.1bil without liabilities while KPS’ Abass was offered RM525.7mil.

“The asset value of RM1.14bil offered by the Selangor government is far below the RM2.2bil invested by Puncak to build and refurbish the water treatment plants under Puncak’s concessions,” Puncak says in its Bursa filing.

“The equity value of RM543.05mil offered is far below Puncak’s shareholder funds of RM1.07bil as at Dec 31, 2007,” it adds.

It says the offer price for Syabas is also insufficient to settle all its (Syabas) borrowings totalling about RM3.3bil and other liabilities.

Selangor Mentri Besar Tan Sri Khalid Ibrahim told StarBizWeek in December that the state government had assessed the water assets in Selangor and “knows precisely the value of each of them”.

“The state believes that by valuing water assets based on future cash flow (which is what the companies are asking for) would not be fair because it intends to keep water rates as low as possible,” an analyst says.

Water concessionaires reject state govt’s offer
Malaysia Star, Malaysia
Pakatan Selangor prepares counter-strike
The Malaysian Insider, Malaysia
Malaysia Selangor water firms turn down state offer