Taliworks securitises its RM600m Selangor water receivables

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KUALA LUMPUR (Dec 27): Taliworks Corp Bhd said it has sold the receivables due from Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) to special purpose vehicle Starbright Capital Bhd.  

Taliworks did not specify the price it struck for the sale, but noted Starbright had issued RM665 million worth of medium term notes in nominal value to purchase the receivables from Taliworks’ wholly-owned unit Sungai Harmoni Sdn Bhd.  

The asset-backed medium-term notes issued by Starbright have been assigned an ‘AAA’ rating by RAM Rating Services Bhd, Taliworks added. 

“We are pleased to have completed the monetisation of Sungai Harmoni’s long-standing receivables and are proud to say that this is the first securitisation of water receivables undertaken in Malaysia, post the water restructuring in Selangor,” said Taliworks executive director Datuk Ronnie Lim in a statement. 

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

The Selangor water industry underwent a restructuring that was completed in August 2018, with Pengurusan Air Selangor Sdn Bhd becoming the sole licensee for water treatment and distribution.  

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

“The monetisation of the water receivables is via a legal true-sale securitisation transaction between Sungai Harmoni and Starbright,” Lim said.

“Sungai Harmoni will have no legal liability and will not be held accountable towards Starbright, in the event of any default under the TSA in the future,” Lim added.  

Shares of Taliworks closed unchanged at 87 sen today, giving the pure-play infrastructure company a market capitalisation of RM1.75 billion.