Acqua SPV Bhd, a special-purpose vehicle set up by Pengurusan Aset Air Bhd (PAAB), has made a firm offer to take over Selangor water bonds.
According to documents obtained by StarBiz, Acqua SPV will pay the bondholders based on their relevant purchase yield to maturity.
The offer documents also provided a comprehensive table explaining the settlement value. The payment will be made to bondholders by June 30.
However, it is conditional upon the receipt of valid acceptances by 5pm on May 31.
Acqua SPV will hold more than 75% of the nominal value of the securities.
Water bonds may be further downgraded if the deadlock between the Selangor and federal government as well as the concessionaires on the restructuring of the state’s water assets remained unresolved.
PAAB has appointed Maybank Investment Bank Bhd as adviser in the offer.
It was reported that the Federal Government would announce a RM6.5bil offer to buy over the Selangor water debts from bondholders.
The offer, from the Federal Government and its unit PAAB, is at a RM200mil discount to the value of the water bonds of RM6.7bil.
According to sources, there is a misconception on the amount to be paid.
“The offer is made on the book value and not the outstanding amount. There is a misconception. The existing securities have so many tranches and the offer is made with the yield to maturity and book value,” a source said.
A bondholder said there was “no hair cut” but a premium payment.
A source said the offer by Acqua SPV was “fair value”.
“Bondholders should accept the offer given the negative outlook rating on issuers. It is actually a fair value,” he said.
RAM Rating Services Bhd had said it might further downgrade the Selangor water bonds before July if the deadlock between the Selangor and Federal Government as well as the concessionaires on the restructuring of the state's water assets remained unresolved.
The initial plan was for the state's water assets to be consolidated by having PAAB take over to streamline the entire industry.
This will lift the burden of heavy capital expenditure from the water players so that they can focus on the operations.
However, this has yet to materialise.
The outstanding water bonds that are rated, excluding the ones issued by PAAB, amount to RM6.7bil out of the total RM9.02bil issued.
The bonds were issued to finance the consolidation of the state's water sector.
On Monday, Energy, Green Technology and Water Minister Datuk Seri Peter Chin said it would be up to the cabinet to decide on the takeover.
However, he said the ministry had yet to submit any papers on the proposal.
“It is for the Cabinet to decide. The paper has not gone in yet. Wait for the paper to be submitted to the cabinet,” he said.-THESTAR
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