Air Selangor denies Splash purchase overpriced

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KUALA LUMPUR — Pengurusan Air Selangor (Air Selangor) has denied a claim by former Selangor menteri besar Tan Sri Khalid Ibrahim that its offer to acquire Syarikat Pengeluar Air Selangor Holdings (Splash) for RM2.55 billion was 10 times more than the value of the company.

Air Selangor said the valuation of RM250 million for Splash was derived by applying 12 per cent return on equity by shareholders of the company since the year 2000 after deducting dividends.

“The consideration of RM2.55 billion offered by Air Selangor last Friday represents a 28 per cent discount off the net book value of Splash,” Air Selangor CEO Suhaimi Kamaralzaman said in a statement.

“As of June 30, the net book value of Splash amounted to RM3.54 billion.”

Selangor, under Khalid, had made a RM250 million bid to buy Splash in 2013, but Air Selangor claimed the bid was 86 per cent lower than the book value of Splash, which was RM1.84 billion at that time. The bid was rejected.

Air Selangor said the net book value of Splash had been verified by three independent parties — RHB Investment Bank, international accounting firms Deloitte and Ernst & Young.

RHB’s valuation as at March 31, 2015 was RM3.2 billion. Deloitte had come up with a valuation of RM 2.7 billion last year and Ernst & Young valued Splash at RM2.8 billion as of March 31, last year.