Tuesday, May 24, 2011

Sarawak Energy to issue up to RM15b debt notes

KUALA LUMPUR: Sarawak Energy Bhd (SEB) has proposed to issue up to RM15 billion in Islamic debt notes, says RAM Rating Services Bhd.

The rating agency had on Tuesday, May 24 assigned a preliminary long-term rating of AA1 (with a stable outlook) to the proposed Sukuk Musyarakah programme.

SEB is a unit of the Sarawak Government and the vertically integrated electricity group has a monopoly over the generation, transmission and distribution of electricity in Sarawak.

'The rating is premised on this integral role and the strong support from both the State and Federal Governments. These strengths are however, moderated by demand risk arising in relation to the sizeable new generating capacity on the horizon and its expected impact on SEB's financial profile,' it said.

RAM Ratings said the group had emerged as a key facilitator of the State and Federal Governments' plans to tap Sarawak's vast energy resources via the development of the Sarawak Corridor of Renewable Energy.

Hence, SEB's generating capacity is set to triple within a relatively short time, with Sarawak's electricity reserve margin expected to peak at 150% by 2012 (2010: 13%).

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