PETALING JAYA, 10 May – TALIWORKS CORPORATION BERHAD (“Taliworks” or “the Company”), an established pure-play infrastructure company engaged in water treatment, highway and toll management, waste and wastewater management today held its Annual General Meeting (“AGM”) in One World Hotel, Petaling Jaya. During the AGM, the Audited Financial Statements for the financial year ended 31 December 2015 were adopted.
Subsequent to its AGM, an Extraordinary General Meeting (“EGM”) was also convened at the same venue, where the Company received shareholders’ approval for: –
1. The proposed disposal of its entire China waste and wastewater management businesses for a total sale consideration of USD54.6 million; and;
2. The proposed acquisition of a 35% equity interest in SWM Environment Holdings Sdn. Bhd. (“SWMH”) for a total purchase consideration of RM245 million
(collectively known as the “Proposed Corporate Exercises”).
The proposed disposal of its entire China businesses will relieve Taliworks from imminent commitments to fund substantial foreign currency upgrading capital expenditure and enable the Company to redirect the disposal proceeds to other mature business investments as part of its new focus. The disposal will reduce Taliworks’ gearing from 0.64x to 0.36x and will result in an approximate one-off gain of RM62.9 million.
In return, the impending acquisition of the interest in SWMH is expected to result in immediate earnings accretion to Taliworks as SWMH has a mature, profitable and substantial solid waste and public cleansing
business in Malaysia with immediate visibility to generate a minimum of 6% dividend payout on the purchase consideration of RM245 million without any impact on group gearing.
Now with shareholders’ approval, the Proposed Corporate Exercises are targeted to be completed by the second quarter of 2016.
Partnership with EPF
Following the AGM and EGM, a press conference was held with the management from both Taliworks and EPF.
Executive Director, Dato’ Ronnie commented, “I believe that this valuable partnership with EPF will continue to drive the momentum of the merger and acquisition business expansion model of Taliworks, where, jointly, we will continue to target strategic assets that will generate immediate cash flow and earnings accretion to both entities which will ultimately support Taliworks’ dividend policy.”
The SWMH Acquisition brings the tally now to three in terms of partnerships between Taliworks and EPF. EPF had acquired a similar 35% equity interest in SWMH in December 2015.
EPF Deputy Chief Executive Officer (Investment) Dato’ Mohamad Nasir Ab Latif said, “For a fund that focuses on generating real rate of returns this partnership is ideal as it is in line with our diversification programme and is able to provide the stability and predictability of income. Furthermore, this investment benefits from Malaysia’s favourable demographic and proven regulatory framework.”
The Company has two existing partnerships with EPF and the acquisition of SWMH by Taliworks by mid-2016 will mark the third partnership between Taliworks and EPF.
First Joint Venture in 2014
· Acquisition of 49% equity interest in Grand Saga Sdn Bhd (the concession holder of the Cheras-Kajang Highway) by EPF
· Cheras-Kajang Highway is a four-lane dual carriageway, stretching from the Connaught Interchange in Cheras to Saujana Impian Interchange in Kajang
· Concession tenure until September 2045.
Second Joint Venture in 2015
· Acquisition of 37.5% equity interest in Grand Sepadu Sdn Bhd, being the concession holder of the New North Klang Straits Bypass Expressway (“NNKSB”) by EPF.
· NNKSB is a two- and three-lane dual carriageway commencing from the North Port intersection to the New Klang Valley Expressway (“NKVE”) interchange
· Concession tenure until December 2032
Third Joint Venture in 2016
· Both EPF and Taliworks will hold 35% equity interest each in SWMH.
· Concession tenure until 31 August 2033.
Taliworks’ new business strategy is to focus its portfolio of investments towards mature operational cash-generating utilities/infrastructure businesses in Malaysia and the developed markets and when appropriate to partner with EPF. Taliworks aims to expand and strengthen its recurring earnings and cash flow streams from long-term concessions to sustain its dividend payout policy.
The Company foresees more collaboration opportunities with EPF in the future.
Image Caption: (L-R) Kevin Chin Soong Jin, Chief Investment Officer, Taliworks Corporation Berhad; Dr Uzir bin Abdul Malik, Executive Director, SWM Environment Sdn Bhd; Y. Bhg. Dato’ Ronnie Lim Yew Boon, Executive Director, Taliworks Corporation Berhad; Y. Bhg. Datuk Shahril Ridza Ridzuan, Chief Executive Officer, EPF; Y. Bhg. Dato’ Mohamad Nasir Ab. Latif, Deputy Chief Executive Officer (Investment Division), EPF; Mohamad Hafiz Kassim, Senior General Manager, Private Markets Department, EPF.