KUALA LUMPUR: RAM Rating Services Bhd assigned preliminary AA3 ratings to KENCANA PETROLEUM BHD []'s two tranches of proposed Islamic debt notes, totaling RM1.50 billion
The ratings agency said on Thursday, June 16 the ratings were for the RM350 million Sukuk Mudharabah (with detachable warrants) (2011/2016) and proposed RM700 million Sukuk Mudharabah programme (2011/2026). Both long-term ratings have a stable outlook.
'The preliminary AA3 ratings are supported by Kencana's strong position in the domestic engineering and fabrication segment,' it said.
RAM Ratings said Kencana had about 20% of the local market in this segment, and has a good track record on prompt delivery within budget.
Kencana's recurring income is from its drilling and marine support services, marginal oilfield operations and sub-sea inspection and maintenance services, which account for 40% of the group's operating profit before depreciation, interest and tax over the medium term.
Kencana and its local peers also benefit from the favourable policies of the government and Petroliam Nasional Bhd that are designed to promote and develop domestic O&G players.
However, RAM Ratings expected Kencana's financial profile to weaken, albeit still sturdy, as its debt level escalates to around RM1.2 billion to fund the capital expenditure and development costs for its new marginal oilfield operations.
This was based on the assumption that it draws down about RM550 million of sukuk as planned and upon the consolidation of AME's debts).
The group's gearing level is expected to peak at around 0.7 times (end-July 2010: 0.32 times), with a corresponding net gearing ratio of around 0.2'0.3 times.
''
The ratings agency said on Thursday, June 16 the ratings were for the RM350 million Sukuk Mudharabah (with detachable warrants) (2011/2016) and proposed RM700 million Sukuk Mudharabah programme (2011/2026). Both long-term ratings have a stable outlook.
'The preliminary AA3 ratings are supported by Kencana's strong position in the domestic engineering and fabrication segment,' it said.
RAM Ratings said Kencana had about 20% of the local market in this segment, and has a good track record on prompt delivery within budget.
Kencana's recurring income is from its drilling and marine support services, marginal oilfield operations and sub-sea inspection and maintenance services, which account for 40% of the group's operating profit before depreciation, interest and tax over the medium term.
Kencana and its local peers also benefit from the favourable policies of the government and Petroliam Nasional Bhd that are designed to promote and develop domestic O&G players.
However, RAM Ratings expected Kencana's financial profile to weaken, albeit still sturdy, as its debt level escalates to around RM1.2 billion to fund the capital expenditure and development costs for its new marginal oilfield operations.
This was based on the assumption that it draws down about RM550 million of sukuk as planned and upon the consolidation of AME's debts).
The group's gearing level is expected to peak at around 0.7 times (end-July 2010: 0.32 times), with a corresponding net gearing ratio of around 0.2'0.3 times.
''
No comments:
Post a Comment