Author: damiantreez | Publish date: Mon, 30 May 2016, 08:52 AM
KUALA LUMPUR (May 27): Kumpulan Perangsang Selangor Bhd (KPSB) said it has allocated a total of RM300 million for investments this year, as the group recalibrates its portfolio of investments, following the sale of its water assets amid the consolidation of the Selangor water industry.
KPSB chairman Raja Datuk Idris Kamarudin said the group is eyeing companies based on several investment criteria, with a chief focus on optimising yield-generating business divisions and targeted investment opportunities in new business sectors to provide a balanced exposure to different sectors.
"KPSB is targeting businesses which are already market leaders or have the potential to become market leaders in their specific industries.
"As value derived from any investment will flow back into the state, the company's investment targets in the future will go beyond being Selangor-based, allowing opportunities for investment in external companies, as well as for bringing international value into Malaysia," he said at a press conference, following the group's annual general meeting today.
To recap, the group's latest investments comprise its 51% stake in water treatment chemical products manufacturer Aqua-Flo Sdn Bhd, its 51% stake in integrated water solutions provider SmartPipe Technology Sdn Bhd and its 60% holdings in Kaiserkorp Corp Sdn Bhd, which wholly owns US-based King Koil Licensing Co Inc, the owner of the King Koil mattress brand.
"We are looking at investments in which we can have a controlling interest, so that we have better representation on the board of these companies, and in turn be able to influence the decision-making process," said Idris.
He said the group will need to do some fundraising to meet its investment target for the year, either through borrowings or equity. The group's cash and cash equivalents stood at RM92.56 million, as at the financial year ended Dec 31, 2015.
Idris said the group is now able to raise debt, following divestment of KPSB's stake in Konsortium ABASS Sdn Bhd.
"With the completion of the sale of Titisan Modal (M) Sdn Bhd which owns a 90.83% stake in ABASS, KPSB has reduced its borrowings from RM1.04 billion to RM30.13 million, resulting in a gearing ratio of only 0.02 times. This gives us room to raise money for our investments," he explained.
Meanwhile, on the divestment of the group's stakes in SPRINT and SPLASH, he said the group hopes for a swift resolution to the issues surrounding the disposal, adding that the group is unable to share details.
However, in the case of SPRINT, Idris said the company has turned profitable recently, causing some deliberation on behalf of KPSB on whether it will push on with the disposal.
Going forward, he said Aqua-Flo will be the biggest contributor to the group's performance this year, after bagging three contracts worth a combined RM98 million, while its licensing business for King Koil will provide steady recurrent income for the group.
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