Changes to Syabas’ offer?

PETALING JAYA: The Selangor government's offers in the state's water saga has revealed that Syarikat Bekalan Air Selangor Sdn Bhd's (Syabas) offer has changed, whereby the equity contribution is now RM520.5 million, compared with RM437.8 million in November 2013 and February 2014; while the liabilities portion is RM3.8 billion compared with RM2.7 billion previously.
AmResearch said that if there is indeed a higher equity valuation for Syabas, its fair value for Puncak Niaga Holdings Bhd would increase to RM3.54 per share, from RM3.40 per share currently.
"Nevertheless, we maintain our fair value for now pending the announcement of a definitive agreement with Puncak Niaga," AmResearch said in a report yesterday.
Following the master agreement that was signed last Friday, Selangor Mentri Besar Tan Sri Khalid Ibrahim said the master agreement is consistent with state's offer totalling RM9.65 billion for the four water concessionaires.
"As Splash (Syarikat Pengeluar Air Selangor) is the only one who did not accept the state's offer, the amount is now RM7.8 billion. However, we note that there is a difference in the figures stated for Syabas compared to the ones released previously," said AmResearch.
With the Langat 2 project poised for completion by 2017, it is understood that a total of 15 packages (water pipes and reservoir) worth RM1 billion will be awarded soon.
"We believe that JAKS Resources Bhd is a strong contender as it is the only player capable of delivering large diameter pipes on a supply-and-lay basis. We opine that the tender for the smaller diameter pipe packages could be competitive given the proliferation of suppliers in the market," said AmResearch.
It maintained a neutral recommendation on the water sector, adding that the signing of the master agreement last Friday is a bold step towards a concrete conclusion of the water saga amid the political uncertainty in Selangor.