by TMR / pic by ISMAIL CHE RUS
KUMPULAN Perangsang Selangor Bhd (KPS) announced last week its indirect 30% associate company, Syarikat Pengeluar Air Selangor Holdings Bhd (Splash Holdings), had entered into a share purchase agreement with Pengurusan Air Selangor Sdn Bhd for the disposal of Splash Holdings’ entire stake in Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash).
The total purchase price of RM2.55 billion to be paid by Air Selangor for the 100% stake in Splash will be distributed via an upfront sum of RM1.9 billion, followed by nine annual instalments for the remaining RM650 million.
The company said once completed, KPS stands to receive total gross proceeds of RM765 million for its stake in Splash Holdings.
At the same time, upon the completion of the disposal exercise, the company is estimated to recognise approximately RM331.6 million in a one-off loss on disposal — which is expected to have a significant impact on the net assets and earnings of the group for the financial year ending Dec 31, 2018.
KPS CEO Ahmad Fariz Hassan (picture) said: “The conclusion of our involvement in Splash marks a further step towards refocusing our endeavours in growing our core businesses into industry powerhouses and generating sustainable returns for shareholders.”
On the use of the proceeds from the disposal, he said the company will adopt a prudent approach on balancing current needs and future growth.
“In addition, we remain steadfast in implementing our value creation strategy in expanding our ongoing core businesses, achieving a lean balance sheet and ensuring the continued sustainability of the group’s overall performance,” he said in a statement.
Barring any unforeseen circumstances, the disposal is expected to be completed by the end of 2018 and is subjected to the fulfilment of conditions precedents taking place prior to completion.
As Splash Holdings is an associate company of KPS, the acceptance of the Splash takeover offer does not require approval from KPS shareholders. — TMR