Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on January 8, 2020

KUALA LUMPUR: Taliworks Corp Bhd yesterday clarified its receivables due from Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) were sold to special purpose vehicle (SPV) Starbright Capital Bhd for a consideration of RM660 million.

Taliworks added that RM626.1 million of the total sale consideration has been paid by Starbright to its wholly-owned Sungai Harmoni Sdn Bhd from the proceeds of the asset-backed medium-term notes that the SPV had previously issued to purchase the receivables.

The remaining sale consideration will be paid to Sungai Harmoni annually over the medium-term notes' tenure, Taliworks said in a filing with Bursa Malaysia yesterday.

Take note the total outstanding receivables due from SPLASH to Sungai Harmoni amounted to RM648.4 million.

Under the securitisation, Sungai Harmoni sold the outstanding receivables to Starbright, together with all rights, benefits and interest under the Termination and Settlement Agreement (TSA) dated May 24, 2019 entered into between Sungai Harmoni, Splash and Pengurusan Air Selangor Sdn Bhd.

Taliworks, on Dec 27, announced the sale of the receivables to Starbright, without specifying the price struck.

Starbright is an independent SPV formed for the securitisation of the receivables due to Sungai Harmoni under the TSA.

To recap, for nearly a decade, SPLASH owed Taliworks for works involved in the Sungai Selangor Water Treatment Plant Phase 1 (SSP1).

The Selangor water industry’s restructuring, completed in August 2018, made Pengurusan Air Selangor the sole licensee for water treatment and distribution.

In May 2019, Sungai Harmoni, SPLASH and Pengurusan Air Selangor signed a termination and settlement agreement for the outstanding receivables owed to Taliworks — of RM644.5 million — to be paid over nine yearly instalments, with a 5.25% interest on the amount outstanding.

Taliworks shares closed unchanged yesterday at 89.5 sen, with a market capitalisation of RM1.8 billion.

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