Aliran ... Sept09

Its 49% associate, Equiventures Sdn Bhd, has reached a settlement with the state government of Johor (SGJ), with Equiventures agreeing to accept a discounted payment of RM314.47 million for receivables owed by the state government pursuant to its privatisation agreement.

The settlement was reached in order to resolve, in the spirit of co-operation, outstanding receivables due to Equiventures from SGJ, as at Dec 31, 2008.

The full amount owed by SGJ totalled RM385.72 million, but following a deed of settlement executed on Aug 25, Equiventures had agreed to a discount on the payment. The payments owed by SGJ is for Equiventure’s water concession in Johor, in which SGJ was to have paid it a fixed monthly payable and bulk sales rate, as provided for in the concession payments. However, Equiventures had commenced legal proceedings against SGJ due to its failure to make the concession payments.

Equiventures had obtained two judgments against SGJ, dated Feb 13, 2008, which SGJ had appealed against, and Nov 14, 2008, for parts of the outstanding payment, it said.

While the amount outstanding to Equiventures as at Dec 31, 2008 amounted to RM385.72 million, at the request of SGJ, Equiventures had agreed to grant a discount, and accepted RM314.47 million as full and final settlement of the total outstanding payment. In consideration of the discounted amount, SGJ would pay RM153 million upon the execution of the deed of settlement. Equiventures had also agreed to a further discount of RM1.5 million for the remaining RM161.47 million, to be paid on or by Sept 30 2009.

With regard to the civil suit, a consent judgement will be entered in favour of Equiventures against SGJ in the sum of RM385.72 million in full and final settlement of the claim in the civil suits. All other interlocutory proceedings shall be withdrawn with no order as to costs.

However, that the full amount of RM385.72 million would become immediately due and payable by SGJ in the event of any delay and/or default of its payment obligations, and the consent judgment would be enforceable against SGJ. SGJ shall not object to or delay the enforcement of the consent judgment. Upon fulfilment of the terms of the settlement, SGJ and Equiventures would have no further claims, liabilities and/or demands against each other, in respect of matters arising up to Dec 31, 2008.

Meanwhile, the settlement was expected to have a positive impact on the group (ALIRAN)’s earnings and net assets for the financial year ending Dec 31, 2009, due to write backs from the doubtful debts previously provided.

AIRB had announced a similar settlement on Tuesday, regarding debt owed to its unit, Southern Water Corp Sdn Bhd (SWC), by Syarikat Air Johor Sdn Bhd (SAJ), in which SWC had granted SAJ a RM30.25 million discount on a RM162.6 million debt owed by SAJ.