Puncak Niaga on mission to make a splash overseas

SHAH ALAM: Puncak Niaga Holdings Bhd, which received approval from its shareholders for the water concessions disposals, sees overseas expansion as a growth driver for both its water solution and oil and gas businesses.
Speaking to reporters for the first time after the prolonged negotiations between Puncak Niaga and the state government, its executive chairman Tan Sri Rozali Ismail (pix) said the group will focus on the existing businesses while looking at diversifying into the oil palm plantation division.
"We've identified a few (parcels of landbank), right now (we are) looking at the valuations, forecasts, profits and whether the price is reasonable," he told a press conference after the company's hour long EGM here yesterday.
Puncak Niaga yesterday received shareholders' nod for the disposal of 100% stake in Puncak Niaga (M) Sdn Bhd and 70% stake in Syarikat Bekalan Air Selangor Sdn Bhd for a total of RM1.56 billion. More than 100 shareholders attended the EGM.
Even as the Selangor water restructuring sage reaches an important milestone with the approval of Puncak Niaga's shareholders for the exercise, it is far from over with Gamuda Bhd still holding out for its 40% stake in Syarikat Pengeluar Air Selangor Sdn Bhd (Splash). Gamuda has consistently said that negotiations with the state government should be guided by the RM2.8 billion book value for Splash.
Selangor state government's offered Gamuda RM250.6 million to buy out Gamuda's equity stake in Splash.
Puncak Niaga's shareholders also approved the proposed distribution of RM1 special cash dividend per share, amounting to a total distribution of RM534.3 million upon the disposals of water concessions.
Puncak Niaga will pocket over RM1 billion in proceeds from the water assets disposals.
Upon completion of disposal, he said Puncak Niaga will not trigger any criteria under the Practice Note 16 and 17.
Rozali expects the deal will be completed by January 16, pending the fulfillment of other terms and conditions by both parties.
"If there are other terms and conditions that are not fulfilled by both parties, then both parties have the right to extend the completion date of the agreement," he added.
Rozali added that a major restructuring within the group will take place following the completion of the disposal exercise.
When asked of the staff arrangement, Rozali said those involved in the water segment will be transferred to state government-owned Kumpulan Darul Ehsan Bhd, but no "termination" will be made.
He stressed that the group will continue to stay on the water solution business despite having disposed of its water concessions in the country, whereby discussions are on-going to provide water solutions to Asean countries.
"Puncak Niaga and our subsidiaries have a track record in waste water and environmental engineering business, we'll focus on this," he said, adding that the group is involved in both government and private sector jobs.
Despite falling global crude oil prices, Rozali believes Puncak Niaga's participation in the oil and gas industry will not be impacted as the group is mainly involved in the servicing segment.
"We see the potential (in the oil and gas industry), people still (use crude) oil, we're not in the exploration business, so we're not really affected by that (the oil price slump)," he said.
On lower capital expenditure (capex) reduction by Petroliam Nasional Bhd (Petronas), he said it has no impact on its three-year Petronas Carigali contract, which had generated more than RM500 million for Puncak Niaga in the first year of execution.
Rozali, however, didn't reveal the value of the remaining two-year term of the contract.
He expects the oil and gas business, which currently contributes 30% to 40% to the group's revenue, to possibly register a revenue growth of between 5% and 10% in 2015.
Adding to that, Rozali said the group is in talks to tap into the oil and gas opportunities beyond Malaysia, which includes Latin America and Asia, and is hopeful that some deals will materialise within the year.