KUALA LUMPUR: Shares of MUHIBBAH ENGINEERING (M) BHD [] resumed their decline in late morning on Tuesday, June 21 as worries about its exposure to the Asian Petroleum Hub again started to make investors jittery.
At 11.51am, Muhibbah fell 12 sen to RM1.41 with 7.12 million shares done.
The FBM KLCI rose 0.37 of a point to 1,559.56. However, the broader market was cautious with losers beating gainers 382 to 187 while 269 stocks were unchanged. Turnover was 406.22 million shares valued at RM429.97 million.
RAM Rating Services said on Monday Muhibbah's RM130 million Islamic bonds were unaffected on the recent news about the receivership status of the owner of the Tanjung Bin petroleum hub project.
Muhibbah's Islamic bonds carry a AAA(s) rating with a stable outlook.
The ratings agency said it was reported that the financier of the APH project, CIMB Bank Bhd, has appointed a receiver and manager for the developer and operator of the APH project.
The outstanding amount owed to Muhibbah for certified works done on the project and related costs stood at RM370.8 million as at Dec 31, 2010.
RAM Ratings said the group's stand-alone credit profile was affected by its weaker-than-expected profit performance, balance sheet and debt coverage ratios, as well as its tight liquidity profile.
'The Group also faces collection issues, including the large aforementioned receivable for the APH project. The project was halted in FY Dec 2009 partly due to the spike in raw material prices in 2008 which led to a ballooning of the project cost,' it said.
It was reported that the project owner is currently negotiating with a new investor to bring in funds to resuscitate and complete the project, including making due payments to contractors.
'Nevertheless, negotiations had been rather protracted, and we view that it is unlikely for Muhibbah to collect the amount owed in the near term.
'Nevertheless, RAM Ratings notes that Muhibbah has an established track record within the CONSTRUCTION [] industry, specialising in oil-and-gas-related jobs, marine-engineering and civil-engineering jobs,' it said.
RAM Ratings said Muhibbah's outstanding order book of RM2.9 billion as at May19 will sustain the group over the next two years.
Muhibbah also derives earnings diversity, from its involvement in the construction, cranes and shipyard segments. It also enjoys recurring dividend income from its associate stakes in the concessionaire for road-maintenance work in Malaysia and an operator and concession holder for three international airports in Cambodia.
At 11.51am, Muhibbah fell 12 sen to RM1.41 with 7.12 million shares done.
The FBM KLCI rose 0.37 of a point to 1,559.56. However, the broader market was cautious with losers beating gainers 382 to 187 while 269 stocks were unchanged. Turnover was 406.22 million shares valued at RM429.97 million.
RAM Rating Services said on Monday Muhibbah's RM130 million Islamic bonds were unaffected on the recent news about the receivership status of the owner of the Tanjung Bin petroleum hub project.
Muhibbah's Islamic bonds carry a AAA(s) rating with a stable outlook.
The ratings agency said it was reported that the financier of the APH project, CIMB Bank Bhd, has appointed a receiver and manager for the developer and operator of the APH project.
The outstanding amount owed to Muhibbah for certified works done on the project and related costs stood at RM370.8 million as at Dec 31, 2010.
RAM Ratings said the group's stand-alone credit profile was affected by its weaker-than-expected profit performance, balance sheet and debt coverage ratios, as well as its tight liquidity profile.
'The Group also faces collection issues, including the large aforementioned receivable for the APH project. The project was halted in FY Dec 2009 partly due to the spike in raw material prices in 2008 which led to a ballooning of the project cost,' it said.
It was reported that the project owner is currently negotiating with a new investor to bring in funds to resuscitate and complete the project, including making due payments to contractors.
'Nevertheless, negotiations had been rather protracted, and we view that it is unlikely for Muhibbah to collect the amount owed in the near term.
'Nevertheless, RAM Ratings notes that Muhibbah has an established track record within the CONSTRUCTION [] industry, specialising in oil-and-gas-related jobs, marine-engineering and civil-engineering jobs,' it said.
RAM Ratings said Muhibbah's outstanding order book of RM2.9 billion as at May19 will sustain the group over the next two years.
Muhibbah also derives earnings diversity, from its involvement in the construction, cranes and shipyard segments. It also enjoys recurring dividend income from its associate stakes in the concessionaire for road-maintenance work in Malaysia and an operator and concession holder for three international airports in Cambodia.
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