Sungai Semenyih Privatisation Scheme

distressed

In December of 2000, Konsortium Aliran Bekalan Air Selangor Selatan (Konsortium ABASS Sdn. Bhd.) was awarded a 30-year concession contract as part of the Sungai Semenyih Privatisation Scheme by the state government of Selangor. The project covered the operation and maintenance of the Semenyih Dam and Water Treatment Plant and other water related works. The Sungai Semenyih treatment plant, which started operations in 1987, produced 545,000 cubic meters of water per day and was the fourth largest treatment plant in Selangor. The plant was responsible for supplying water to Putrajaya, Cyberjaya, Dengkil, the Kuala Lumpur International Airport (KLIA), Puchong, USJ and parts of Klang. Konsortium ABASS was to sell the treated water to the Selangor Waterworks Department (JBAS) at an agreed price. The contract began on January 2, 2001. Konsortium Abass was owned by Malaysian private firms Zufar Water Services Sdn Bhd (45%) and Chemical Waste Management Sdn Bhd (CWM) (25%). Selangor government-owned Kumpulan Darul Ehsan Bhd held 30%. In October of 2005, CWM disposed of its 25% stake in Konsortium Abass to Titisan Modal (M) Sdn Bhd for RM132 million cash. Titisan was a special-purpose vehicle set up to buy Konsortium Abass Sdn. Bhd. and was owned by the Selangor government-owned Kumpulan Perangsang Selangor Bhd. (55%), and the private Operasi Murni Sdn. Bhd.(45%). The operation of the Sungai Semenyih plant was originally handed over to Puncak Niaga (M) Sdn Bhd by the Selangor state government on May 5, 1997. Under the agreement, PNSB was to manage and maintain the plant for a period of one year subject to extension. After the first extension of one year, PNSB had been operating the plant on a month to month basis until the decision by the state government to hand over the plant over to Konsortium Abass. Investment plans for this project were not made public. The project sponsors enjoyed a guaranteed volume and fixed bulk supply rates which were increased every five years until the end of the concession in 2030. Kumpulan Darul Ehsan Bhd. was removed from sponsor (30% stake) because it is state owned Malaysia's Titisan Kicks Off MYR738M 6- To 15-Yr Bonds 319 words 26 April 2006 03:23 Dow Jones International News English (c) 2006 Dow Jones & Company, Inc. KUALA LUMPUR (Dow Jones)--Malaysia's Titisan Modal (Malaysia) Sdn. Bhd. has launched its MYR738 million six- to 15-year fixed-rate bonds and will sell them on a bought-deal basis, bankers close to the deal said Wednesday. "They are targeting to complete (the sale) by this week," said a banker. The bonds are in 10 tranches that range in size from MYR10 million to MYR110 million, he said. He declined to detail the indicative yields of the 10-tranche bonds. Demand for the bonds is good, bankers said, as it comes just before the central bank's third monetary policy statement for the year. "Everybody is waiting for the central bank policy statement (due 1000 GMT, Wednesday)," said a second banker. "With the dearth of paper and this being a water industry issue, there is interest," he added. Bank Negara, the central bank, is widely expected to keep its 3.25% overnight policy rate unchanged Wednesday. Affin Merchant Bank Bhd. - the lead arranger of the issue - is buying the bonds from Titisan before selling them to institutional investors, the banker added. Officials at Affin Merchant Bank and Titisan weren't immediately available for comment. Titisan's shareholders are Kumpulan Perangsang Selangor Bhd. (5843.KU), which owns 55%, and closely-held Operasi Murni Sdn. Bhd., which has the remaining 45%. Titisan is a special-purpose vehicle set up to buy Konsortium Abass Sdn. Bhd., which operates a water treatment plant in central Malaysia's Selangor state. Malaysian Rating Corp., or MARC, rated the bonds "A+" Monday. "The rating is a reflection of the water industry in the state of Selangor, whereby the demand fundamentals for treated water is unwavering," MARC said in a statement. -By Carolyn Lim, Dow Jones Newswires; (603) 2692 5254, carolyn.lim@dowjones.com None