Splash sues Syabas, claims RM4.22b in outstanding receivables

PETALING JAYA: Gamuda Bhd’s indirect 40% associate company Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) is suing Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) for RM4.22 billion in outstanding receivables owing to Splash, excluding interest and costs, ahead of the outcome in the Selangor water restructuring saga.
“Splash will commence legal proceedings against Syabas for all outstanding receivables owing by Syabas to Splash,” Gamuda said in a stock exchange filing yoday.
In March, Gamuda received four legal suits filed by Tenaga Nasional Bhd (TNB) against Gamuda’s 80% owned subsidiary Gamuda Water Sdn Bhd for failure to pay electricity bills. In addition, it received two third party notices by Splash from Sungai Harmoni Sdn Bhd in respect of the suits filed by TNB against Sg Harmoni, also for failure to pay electricity bills.
Splash’s suit will not have any significant financial and operational impact on the Gamuda group for the financial year ending July 31, 2018. The Gamuda group will include its share of interest on the outstanding sum in its financial statements, as and when Splash is awarded the interest on the outstanding sum.
Gamuda said it will make the necessary announcements to Bursa Malaysia Securities as and when there are material developments.
“However, updates on Splash’s suit including hearing dates (if applicable) will be disclosed in the quarterly results of the company,” it said.
In its latest annual report, Gamuda said the delay in the recoverability of amount due from Syabas was primarily due to the delay in the finalisation of the water restructuring initiatives.
“The settlement of such indebtedness is expected to take place only after the state government of Selangor has completed the consolidation of all water assets,” it said.
Gamuda added that the outcome of the water industry restructuring initiatives can only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the group. The restructuring initiatives may develop in ways not initially expected.
Last week, Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili said the federal government will either invoke Section 114 of the Water Services Industry Act 2006 to take over water management in Selangor or extend/ terminate Selangor’s water industry restructuring agreement, if a deal is not reached by July 2018.
On Bursa Malaysia today, Gamuda rose 0.59% to RM5.12 with 7.09 million shares done.