Friday 29 Mar 2024
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KUALA LUMPUR (Feb 10): Puncak Niaga Holdings Bhd announced that the disposal of its water assets to Pengurusan Air Selangor Sdn Bhd has been extended by another month to March 9, 2015.
 
In a filing with Bursa Malaysia today, Puncak Niaga (fundamental: 1.5; valuation: 1.2) said the extension was because there were still pending issues related to the water asset transfer between Selangor and federal government.
 
According to Puncak Niaga, the sale of its 70% stake in Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) is still awaiting consent from the Prime Minister’s Department.
 
Puncak Niaga had on Nov 11 last year signed a conditional sale and purchase agreement (SPA) with Pengurusan Air, to dispose of its entire equity interest in Puncak Niaga (M) Sdn Bhd and 70% stake in Syabas to the latter, for a cash consideration of RM1.55 billion.
 
Under the terms and conditions of the SPA, all conditions precedent were supposed to be fulfilled on Jan 12, 2015. This deadline was however extended to Feb 9, 2015, which has now been further extended to March 9.
 
On the second extension, Puncak Niaga said its board of directors has urged both the state and federal government “to work closely and resolve the aforesaid matters”.
 
“The longer the exercise takes to complete, it will affect the level of services and management of the water supply system in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya as many major decisions on capital expenditure and operating expenditure cannot be implemented, as these had been put on hold by the government pending completion of the consolidation/restructuring of the Selangor water industry,” it said.
 
The SPA was meant to fulfil the Selangor government’s intention to consolidate and restructure the water industry in Selangor, Kuala Lumpur and Putrajaya, while expediting the construction of the Langat 2 water treatment plant and the distribution system.
 
Puncak Niaga closed four sen or 1.5% higher at RM2.7 today, with 1.16 million shares traded, giving it a market capitalisation of RM1.1 billion.
 
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for details on a company’s financial dashboard)

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