SHAH ALAM (Jan 7): Puncak Niaga Holdings Bhd (PNHB) is eyeing Asean countries as potential markets to expand its water and environment engineering business, which will remain as its core business, after the disposal of water assets to the Selangor government.

At the same time, the group is looking at diversifying into the plantation sector while upping its investment in the oil and gas business.

PNHB's executive chairman Tan Sri Rozali Ismail said PNHB would still be involved in the water and environment engineering business.

"PNHB has a track record in the water and environment engineering business. We have a lot of water business with the government and private sector; we'll continue this," Rozali told a press conference after an extraordinary general meeting here today.

The group is in talks with several Asean countries to provide "total water solution" in water treatment and distribution in the countries, he added.

In the EGM today, shareholders passed the two resolutions to dispose of 100% and 70% stakes in Puncak Niaga Sdn Bhd (PNSB) and Syarikat Bekalan Air Selangor (Syabas) respectively to Pengurusan Air Selangor Sdn Bhd (Air Selangor) for a total cash consideration of RM1.56 billion.

A bumper dividend of about RM1 per share, or RM534 million from the cash proceeds, will be distributed to shareholders after the deals are completed.

At midday's break price of RM2.91, the bumper dividend would translate to a 34.36% yield on each Puncak Niaga share.

Rozali said the approval is one of the conditions in the sales and purchase agreement signed between PNHB and Air Selangor in November 2014.

The deal is expected to be completed on Jan 16, provided both parties fulfilled the conditions in the agreement.

The approval by shareholders would pave the way for the consolidation of water assets by the Selangor state government that begun six years ago.

Speaking on future plan of the company in 2015, Rozali said that the group would continue to focus on its existing businesses, such as in oil and gas services, while looking at buying plantation land in Malaysia.

He also sees oil and gas investment, which accounted for 30% to 40% of the group's revenue, growing some 5% to 10% this year – an estimate he considered as "conservative".

Rozali revealed that the group still has two years’ worth of contracts with Petronas Carigali Sdn Bhd – a unit of Petroliam Nasional Bhd -- with no indication that the 15%-20% capital reduction this year by the country’s national oil company would impact the contracts.

Rozali said in the first year of the contract, the value was RM500 million.

When asked, Rozali did not reveal how much of the cash proceeds from the water asset sale would be ploughed back into PNHB’s oil and gas investments.