KUALA LUMPUR: Kumpulan Darul Ehsan Bhd (KEDB) has extended the expiry date for KUMPULAN PERANGSANG SELANGOR [] Bhd (KPS) to acquire a 15% stake in Syarikat Bekalan Air Selangor Sdn Bhd (Syabas)by another 18 months.
KPS said on Tuesday, May 3 that the company and KDEB had on last Friday, April 29 had entered into a supplemental agreement to the vary the terms of the share sale agreement.
Under the latest development, the expiry date of the put option granted to KPS by KDEB pursuant to the acquisition, was extended for a further 18 months from June 30, 2011 to Dec 30, 2012.
KPS said as set out in the circular to shareholders dated Nov 24, 2008 in relation to the acquisition, the intention was to further increase KPS' participation in the imminent consolidation of Selangor's fragmented water industry.
In conjunction with the acquisition, the put option was granted to KPS to mitigate the downside risk of acquiring the 15% stake in Syabas as there were significant changes taking place within the water industry.
The exercise price for the put option was also set to compensate KPS in terms of the opportunity cost of the said investment until such time when the investment can be realised. In addition, the put option was also backed by a bank guarantee.
'The downside risk was also further mitigated by the undertaking by KDEB to make up the shortfall in the event the binding offer pursuant to the consolidation exercise is less than the value of KPS' original cost of investment in Syabas and the opportunity cost associated with such investment,' it said.
KPS said on Tuesday, May 3 that the company and KDEB had on last Friday, April 29 had entered into a supplemental agreement to the vary the terms of the share sale agreement.
Under the latest development, the expiry date of the put option granted to KPS by KDEB pursuant to the acquisition, was extended for a further 18 months from June 30, 2011 to Dec 30, 2012.
KPS said as set out in the circular to shareholders dated Nov 24, 2008 in relation to the acquisition, the intention was to further increase KPS' participation in the imminent consolidation of Selangor's fragmented water industry.
In conjunction with the acquisition, the put option was granted to KPS to mitigate the downside risk of acquiring the 15% stake in Syabas as there were significant changes taking place within the water industry.
The exercise price for the put option was also set to compensate KPS in terms of the opportunity cost of the said investment until such time when the investment can be realised. In addition, the put option was also backed by a bank guarantee.
'The downside risk was also further mitigated by the undertaking by KDEB to make up the shortfall in the event the binding offer pursuant to the consolidation exercise is less than the value of KPS' original cost of investment in Syabas and the opportunity cost associated with such investment,' it said.
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