Singor, thanks for the update, sincerely hope news on transferred asset will be published and soon...

cheoky, what's left now is for Selangor state government to provide 2 billion worth of asset as collateral to get loan from federal to fund the takeover from Puncak. Thought that's understood by the market, no?!? Is market has so little faith with Azmin/federal to get the final stage done?

http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=68488&name=EA_GA_ATTACHMENTS

14 SEPTEMBER 2015
FOR IMMEDIATE RELEASE
PUNCAK NIAGA HOLDINGS BERHAD (“PNHB” OR “COMPANY”)

LATEST STATUS ON :-
(I) PROPOSED DISPOSAL BY PNHB OF THE ENTIRE EQUITY INTEREST AND CUMULATIVE CONVERTIBLE REDEEMABLE PREFERENCE SHARES HELD IN PUNCAK NIAGA (M) SDN BHD TO PENGURUSAN AIR SELANGOR SDN BHD (“PROPOSED PNSB DISPOSAL”)

(II) PROPOSED DISPOSAL BY PNHB OF 70% EQUITY INTEREST HELD IN SYARIKAT BEKALAN AIR SELANGOR SDN BHD AND RM212.0 MILLION NOMINAL VALUE OF REDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS TO PENGURUSAN AIR SELANGOR SDN BHD (“PROPOSED SYABAS DISPOSAL”)

(COLLECTIVELY REFERRED TO AS “PROPOSED DISPOSALS”)

We refer to the conditional sale and purchase agreement dated 11 November 2014 signed between Puncak Niaga Holdings Berhad and Pengurusan Air Selangor Sdn Bhd (formerly known as Temasek Tiasa Sdn Bhd) (“Air Selangor”) (“SPA”) on the Proposed PNSB Disposal and Proposed SYABAS Disposal for a total cash consideration of RM1,555.3 million.

The above SPA was signed with the full support and consent of the Federal Government whereby it is the intention of the State Government of Selangor to consolidate / restructure the water industry in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya (“Selangor Water Industry”) and for the Selangor Water Industry to be managed by the State Government of Selangor (Consolidation / Restructuring of the Selangor Water Industry”) and for the Federal Government to expedite the construction of Langat 2 and the related trunk distribution system.

Under the terms and conditions of the SPA, all conditions precedent were supposed to have been fulfilled on 12 January 2015 (“Stop Date”) whereby upon completion of the SPA, PNHB will hand over its water concession business in Selangor under PNSB as well as SYABAS to the State Government of Selangor and in return, the State Government of Selangor will pay RM1,555.3 million to PNHB.

This Stop Date has been extended for seven times to enable the pending issues related to the water asset transfer between the State Government of Selangor and the Federal Government to be resolved. The latest Stop Date being the Seventh Extension of Time of the SPA fall due on 14 September 2015.

To date, we understand that Air Selangor is still not able to fulfill the conditions precedent in the SPA and there is a need for a further extension (eighth extension) of the Stop Date before the Proposed Disposals can be completed to facilitate the Consolidation / Restructuring of the Selangor Water Industry to be managed by the State Government of Selangor via its state-owned entity, Air Selangor.

The negotiations on the restructuring of the water services industry has taken a long time since February 2008 before the SPA was finally signed between PNHB and Air Selangor on 11 November 2014. However, the SPA has not been completed and the delay in the completion of the entire Consolidation / Restructuring of the Selangor Water Industry by the Federal Government and the State Government of Selangor has inadvertently resulted in severe repercussions and inconvenienced the consumers in Selangor and the Federal Territories of Kuala Lumpur and Putrajaya of their rights to treated water.

As at to date:-

(1) The treated water reserve margin is below 1% and this decrease to negative during peak hours and the situation is extremely critical.

(2) The authorities have suspended SYABAS Capital Expenditure (“CAPEX”) and to date, only 1,020 km of old AC Pipes have been replaced. However, only a very small portion of pipe replacement programmes are allowed by the authorities based on the level of urgency.

(3) The Non-Revenue Water (“NRW”) cannot be reduced and may keep increasing and is currently sustaining at below 32%. When SYABAS took over from Perbadanan Urus Air Selangor Berhad (“PUAS”) in 2005, the NRW level was 42.78%. SYABAS managed to reduce it to 33% in 2008, just three (3) years after the takeover via an intensive NRW programme. However, since the programme was stalled since 2008 pending the restructuring of the water services industry, the NRW level will keep increasing if no action is taken and this will also directly aggravate the current water shortage problem faced by the consumers.

(4) A total of 961 new development projects as at 31 July 2015 continue to be put on hold due to lack of treated water supply.

hng33, well, have I learnt to time the market better, my profit should also be better and risk lower

hng33, I am no saint lah, sure got frustrated when thought I have research well before investing to know that its not in favor of the market, while yet can't figure out why... And frankly, I am keen to know the who and why the selling in Puncak today, not only it clears my mind, but help in understanding the market better...

hng33, still, can't help but a HUGE wonder as to WHO and WHY the selling...

Wonder who & why is the selling?

Moi, Canada is producing tar sand oil, not shale oil... are you sure you know the difference. The major oil glut in the market is caused by Saudi, Iraq and Iran. At 40-50 range, they are not sufficient to fund their nation's social and infrastructure development and have to dig their own reserve to survive right now. Wonder how long can it last. Frankly, I am not opposing a low oil environment, just think people over pessimistic right now. Until a suitable yet 'cheap' replacement is available, oil is here to stay. Look at the demand, its increasing every year, despite claim that the industry is doom. Don't even know what that means?!?

Moi, post water deal, Puncak will have a cash of over 3.56 or 3.64 per share depending on your valuation method and assuming all sukuk/warrant are converted (should be much higher than 3.64 if portion of sukuk/warrants not converted.) Puncak burnt less than 40 million cash, that's less than 0.08 per share a year, over the past 4 quarters! And that actually after taking in the losses in the water treatment plant in China that it has just sold and interest paid to sukuk holders. In addition, BP had earlier forecast that crude oil will gradually recover to around 70 by 2020 given replacement cost of crude oil. Moreover, Puncak can always venture into affordable property development in Kuala Selangor given its land bank there is about 250 acres (more than enough for a 10 years projects) Thus, to assume (1) the asset of almost 1 per share has 0 value is crazy (2) a heavy discount of over 35% to its future cash in hand is absurd!

Of course, I can't rule out the possibility that Azmin or federal will not honor water in the last minute and had the water restructuring in limbo for some more donkey years. That's politics that no one can really predict except Azmin and federal.

finally, Puncak rises 1 cent. Hope there are more to come

truth is, until now, I have no idea why had the analysts valuing Puncak at such a low level (barely 70% of its cash in hand should deal completed), but can only come with two possible scenario, one being doubting Puncak water deal completed before Oct 01 and the other being doubting Rozali can and will manage remaining cash of over 1.2 billion prudently.

But, assuming deal is sealed, with a cash after asset disposal of over 1.9 billion with an additional 500 over million of land and investment, I really don't see why I should particularly concern about its future potential. This is particularly so after oil & gas and plantation sectors are at their low point currently. The freed up 1.2 over billion cash should allow Puncak to seek good deal for long term prospect. Of course, I can only hope Rozali will look after small shareholders' interests beside his.

wonder if rozali would consider privatizing Puncak at 3.70 cash per share post deal? That should be good for him and us, the small fishes.

upsidedown, doesn't really make sense with such a low volume. Say they can absorb 25%, that's less than 250,000 shares. Doing it for 3 days, that's not even 1 million shares.

No eye see, news n price are set as if no deal in sight.

frankly, I have decided to wait til the end of this month for puncak announcement before deciding anything. plus, really nothing much can be done already

奶奶的熊，那个狗蛋在抛售，再次晕倒。。。

Die hard hard if epf selling, lack big player in puncak

hng33, I see, thanks

Guess Kenanga is the only remaining big research house to have high hope on Puncak?

http://www.4-traders.com/PUNCAK-NIAGA-HOLDINGS-BER-6491195/news/Puncak-Niaga-Berhad--Shares-in-water-related-companies-spurt-21003722/

KUALA LUMPUR: SHARES of water-related companies involved in the Selangor water deal spurted yesterday on news that the companies are finally coming to a conclusion with the signing of an agreement between the related parties today.

The parties are Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Sdn Bhd (PNSB), Konsortium Abbas Sdn Bhd and Syarikat Pengeluar Air Selangor Sdn Bhd (Splash).

Puncak Niaga Holdings Bhd's shares on Bursa Malaysia closed 18 sen higher to settle at RM2.70 with 1.9 million shares traded.

Kumpulan Perangsang Selangor Bhd, meanwhile, gained 14 sen, or 11.86 per cent, to RM1.32 a share with a total of 2.2 million shares traded.

However, Gamuda Bhd's shares slipped 15 sen to close at RM4.36 after hitting intra-high of RM4.50.

Kenanga Investment Bank Bhd said as the Selangor water assets contribute to almost all of Puncak Niaga's earnings, there will be a huge earnings vacuum for the group.

"The group has yet to identify any future investment to fill the earnings gap," it said in its note.

The research firm has set a target price of RM3.99 for Puncak Niaga with "outperform" call on the stock.

Puncak Niaga has a 100 per cent and 70 per cent ownership of PNSB and Syabas, respectively.

Kumpulan Perangsang owns 100 per cent stake in Konsortium Abbas and 30 per cent interest in Splash, while Gamuda has a 40 per cent stake in Splash.

According to the Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili, the deal would be inked in Shah Alam.

It will see four agreements - the facilities agreement, lease agreement, rights of use agreement and settlement agreement, under the state's water services industry restructuring sealed between Pengurusan Aset Air Bhd and Pengurusan Air Selangor Sdn Bhd.

The agreements are condition precedents to effect the master agreement for the restructuring, Ongkili said.

He said with the sealing of the agreements and handing over of the licences, the condition precedents would be fulfilled and that means the master agreement would take effect from tomorrow.

interestingly, CIMB who used to have a favorable rating on Puncak and cut back target price due to political gridlock, remains its target price for Puncak at 2.55 too after Am Research, Affin Hwang, and MIDF all retain their ratings. Why? Why? Why? To allow institutional investors buying? Seeing more issues before taking over Puncak? Seeing Rozali the worst of its kind, I mean majority shareholders, that won't reward shareholders?

worth mentioning is the past downgrades by these research houses have mainly the political gridlocks in completing the water restructuring...

upsidedown, warrants are traded at premium, not discount. Puncak at 2.66 and warrant at 1.72 while conversion cost is 1, so warrant is at 0.06 premium right now. Though, since warrant is traded without including the conversion cost, any price gain in Puncak will cause warrant to rise faster relatively.

Ah, forgot to mention, if I were not wrong, Puncak also has 250 acres of land in Kuala Selangor, wonder if that land is valuable?!? Think its suitable for township development, just not sure if the location is good or not

sudahkena, truth is, if not saddled with this investment, I would have purchased others who have suffered from the currencies depreciation and waited for another year or two for Ringgit to recover slightly and watch their valuation improved. Puncak is right now the equivalent of sweetened 鸡肋. I also don't know what to do with it, haha... Don't think warrant conversion will cause Puncak price to drop, but not sure about sukuk. Really have to know sukuk holders to decide, one on if they will convert and another if they are long term investors. (don't tell me its rozali, hahaha...)

that I have no clue, but the basis their valuation and analysis is terrible, as if they have only a few minutes to come to a conclusion and do the write-up... MIDF has a higher valuation of 3.16. Though, it can't even get the number of enlarged shares right. MIDF uses 533.3 million shares, but Puncak report stated earlier 532.517 million shares will be the enlarged number of shares. And somehow, MIDF comes out with a FY2016 forecast profit of RM 10.8 million and pegged it with a PER of 12 to come to the valuation of its existing businesses, totally ignoring its cash from converting warrants and sukuk.

affin hwang has an impressive valuation on Puncak: We view this positively as this development would pave the way for Puncak to receive the delayed proceed from the disposal of its water asset... We maintain HOLD with a target price of RM 2.60 with a 10% to account Puncak's existing challenging business in the oil & gas industry due to low crude oil prices.

Hasn't affin hwang 'researcher' realized that upon disposal and distribution of special dividend, Puncak will be in a net cash position of RM 2.57 per share at minimum?!? And with an interest of even 3%, that would be over RM 40 millions? And that amount is about what it lost in a year, assuming business will be as bad as its first 6 months of operation in 2015?!? And, operating cash flow will be POSITIVE with over RM 16 million a year under similar operating condition?

To the extent that Puncak's cash position should deserve a 10% discount. A similar valuation approach, if applied to plantation companies, guess we should see KLCI reaching 1300 soon, or possibly below 1000

If there is anything that I can think of that could drag down Puncak share price, that would be convertible sukuk. This sukuk is convertible at 2 per share. If Puncak price is above 2, a conversion will cause an immediate return in excess of 2. Though, based on issued shares outstanding of 418 million, market has yet to observe the flotation of sukuk converted shares. Sigh, another few days of waiting period, I guess!

sudahkena, go and read today Edge's article on restructuring and assume you have no prior knowledge about Puncak. If you get attracted to Puncak share, I would be very surprise. If we can't bring demand for the stock, how would you be able to 'drive' up the price?

wiwangwang, surely upset, given my exposure and time spent on Puncak. Puncak price rose less than 10% on the news (big joke given market cap is much smaller than offered price for Selangor water asset) and it has already dropped due to 'technical correction.' Meanwhile, can't understood how on earth, both Edge and analysts barely respond on the news. I would understand had Edge raised concern about Azmin's willingness to complete deal. Instead, the news is ignored until late evening. To say that Edge is barred from joining is absurd given that Selangor state could have invited Edge! I don't know what's behind the whole issue, but strange is definitely what I smell since the last few days.

Another big joke by Am Research, 'uncertain future' with cash in hand of over 1.8 billion upon deal completed, so target price remain 2.80, a far cry below its cash in hand then, as if Rozali will eat all those money once Puncak receives the money.

Sudahkena, never know why am research so hard on puncak, will distribute special dividend ended up as may...

Sudahkena, don't be disappointed. probably will rise this afternoon, think will close at least 2.71, if you look at the close yesterday. Very similar, open higher to sell down during the day and ended up closing at a price higher than the close of previous day.

Singor, I have the same feeling. see above

how come I have a feeling that today's drop is by specialists selling to try the market and an attempt to buy low?

hng33, actually, I didn't add position by enlarging my portfolio except for when purchasing Puncak at 2.48, I merely sold some others to buy Puncak today.

added some at 2.67, fainted, the more I buy, the more it falls

err... its not because I am stressed up, but upset with how the whole issue is treated.

I have added more Puncak today at 2.68, 2,69, and 2.71 by selling almost all of my MNRB. Hope this is not a stupid decision.

roger, I have an average holding cost of 3, how can I earn? If you were to base on my purchase a few days back at 2.48, then, of course yes. But I am not ostrich leh...

smartly, my cost is 3 after including interest cost and selling cost. Well, slightly lower with today's added position. Truth is, regret doing it, mainly because I have meant to pare down my position for some time.

hng33, agree, that's why I said unless they also see short term gain in the deal (I mean EPF as they here)

My guess, based on technical trend (things that I never believe but try to comprehend), Puncak is still on an uptrend. Fundamentally, price barely reflects cash in hand. Furthermore, analysts on Puncak seem to be still in sleeping mode and do not react. Edge has been harsh on Puncak particularly. While agreeing to a concluded water restructuring, Edge has purposely focused on 'things yet to be done' with Splash. Probably that's why I am adding some more today, or just merely because I am upset with biased financial news reporting?

rich, guess unless Rozali is telling EPF a rosy picture after disposal, EPF won't buy long term. Unless they also see short term gain in the deal...

hng33, my feeling is, traders are trading due to Bollinger Band or whatever other technical indicators telling them to sell. Truth is, barely any analyst has responded towards the signed agreement, as if the four agreements carry no weight and only a cash transferred to Puncak by Selangor has any meaning. Even the Edge has reported with a focus on what next with Gamuda's Splash, as if deal is a long time to go, giving false impression to what's between Puncak and Selangor state coming to a closure. Reason as to why so, frankly, that would be totally out of my understanding already!

can't tahan seeing the price drop, bought some at 2.69 and 2.71. hope I am not catching a falling knife, sigh!

really have to respect hng33, selling when knowing deal is to be completed and market cap is at heavy discount to Selangor water asset disposal

the more I read into news, the more I felt that the politicians are feeling the pain from frequent water disruptions of late in Selangor. Why else would they consider to take over Puncak and Syabas before ABBAS when both Puncak and KPS have agreed to the takeover offer?!? Do we need to thank Rozali for this?!?

wonder if analysts are that slow to react to Selangor water restructuring news or if they are still not confident with the signing?!? CIMB Research does not published any revised valuation on Puncak today

opening 2.76?

hopefully Puncak will rise above 3 tomorrow, best if ended above 3.10. Think the news is heavily unexpected!

puzzling, with state and federal signing the documents already, EDGE has not even published it, as if this never happen. Meanwhile, analysts have not even come out with revised target price. Wonder if this has caught them by surprise that they didn't even know how to react, or they are not even aware of this?!?

Thanks sudahkena

Good good good, hope afternoon price performance will be better

hng33, are you mocking me?!?

sudahkena, I think our nation needs a third kind of alliance much different from current PR and BN, where elected politicians take calls from their party too much to ignore commoners like us.

roger, don't laugh so fast. Once confirmed, Puncak price may shoot much higher than 3.00 tomorrow or before closing today. Our governments, either from both PR or BN, have offered us little while taking too much from us and taken us by granted

hng33, old man easily fainted mah :) Actually, I doze off a few minutes just now when reading Edge Daily, then read so many of us trying to facts-finding, so 有感而发，哇哈哈哈