KUALA LUMPUR: Malaysian Rating Corporation Bhd (MARC) has affirmed its rating on Kapar Energy Ventures Sdn Bhd's (KEV) RM3.402 billion Bai' Bithaman Ajil Islamic Debt Securities (BaIDS) debt notes AA+ ID with a stable outlook.
'The rating has been affirmed despite KEV's weak liquidity and second consecutive year of losses on MARC's expectation of ongoing support from TENAGA NASIONAL BHD [] (TNB), KEV's ultimate holding company,' it said on Thursday, Feb 17.
The ratings agency said TNB recently confirmed it would provide financial support to KEV to enable it to meet its obligations to facilitate the preparation of KEV's financial statements on a 'going concern' basis.
MARC said its decision not to equalise the senior unsecured debt ratings of TNB and KEV following the TNB's recent rating upgrade to AAA/Stable takes into account KEV's very much weaker fundamentals relative to TNB and MARC's view that KEV is not a core operating subsidiary of TNB.
The stable outlook on the senior debt rating reflects MARC's view that, in the short term, there is very limited up or downside potential for the rating.
KEV was set up to acquire and operate the Sultan Salahuddin Abdul Aziz Shah power plant, the largest multi-fuel thermal power station in Malaysia with a 2,420-megawatt (MW) nominal capacity. It'' operates four generating facilities running on coal, natural gas or oil.
'The rating has been affirmed despite KEV's weak liquidity and second consecutive year of losses on MARC's expectation of ongoing support from TENAGA NASIONAL BHD [] (TNB), KEV's ultimate holding company,' it said on Thursday, Feb 17.
The ratings agency said TNB recently confirmed it would provide financial support to KEV to enable it to meet its obligations to facilitate the preparation of KEV's financial statements on a 'going concern' basis.
MARC said its decision not to equalise the senior unsecured debt ratings of TNB and KEV following the TNB's recent rating upgrade to AAA/Stable takes into account KEV's very much weaker fundamentals relative to TNB and MARC's view that KEV is not a core operating subsidiary of TNB.
The stable outlook on the senior debt rating reflects MARC's view that, in the short term, there is very limited up or downside potential for the rating.
KEV was set up to acquire and operate the Sultan Salahuddin Abdul Aziz Shah power plant, the largest multi-fuel thermal power station in Malaysia with a 2,420-megawatt (MW) nominal capacity. It'' operates four generating facilities running on coal, natural gas or oil.
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