Dato’ Eric See-To
The Water Concession agreement given under Tun Mahathir in the year 2000 is extremely profitable to SPLASH.
In 2014, SPLASH had revenues of RM416mil and had profits before tax of RM379mil.
In 2015, SPLASH made a pre-tax profit of RM331mil out of revenues of RM434mil.
While the year 2016 saw SPLASH make a profit of RM396mil out of revenues of RM435mil.
These are among the highest profit margins for any concession company anywhere in the world.
When Tan Sri Abdul Khalid Ibrahim decided to offer a lower price of RM1.85 billion (RM250mil equity value and assuming of RM1.6bil of debt) to buyout SPLASH in the year 2014 compared to the RM2.975 billion (RM1.58b equity value and RM1.4b of debt), Khalid had taken these yearly profits into consideration.
TS Khalid had deemed that SPLASH had made more than enough money every year since 2009 to justify a lower price in 2014.
However, PKR deemed the price offered for SPLASH by Khalid in 2014 was too low and said this was one reason why Khalid has to be removed as Menteri Besar.
The new Selangor Govt under Azmin Ali had reportedly wanted to offer RM4.4 billion to buy out SPLASH instead (RM2.8b equity value and RM1.6b debt) – much higher than the RM1.85b offered by Khalid.
Upon taking office, new MB Azmin Ali had also quickly re-issued the operations license to SPLASH that was cancelled by TS Khalid.
As documented in the Langkah Kajang document to justify removing Khalid, it was alleged by Khalid that the top PKR leaders had intervened and requested Khalid to offer SPLASH a “fairer” price.
A tycoon with the title of Tan Sri who is a 30% shareholder of SPLASH has close links to PKR including being a founding director of one of their organizations.
Due to SPLASH’s strong profitability, every year of delay acquiring SPLASH may mean a big loss to the Selangor Govt.
Source: Eric See-To