KUALA LUMPUR:'' UEM Group Bhd and the Employees Provident Fund Board, which made a takeover offer for PLUS EXPRESSWAYS BHD [], are believed to be in the final stages of discussions with the authorities on the terms of the new supplemental concession agreements (CAs).
RAM Rating Services Bhd said on Tuesday, Oct 18 that based on the current progress of the supplemental CAs, which are the key milestones for the entire exercise, the corporate restructuring is expected to be completed within the next few months.
It said that upon the completion of the restructuring exercise, the Islamic debt notes of RM4 billion Sukuk will be redeemed before its maturity and subsequently cancelled.
RAM Ratings had reaffirmed the AA1 rating of PLUS SPV Bhd's (PLUS SPV) Sukuk of up to RM4.0 billion in nominal value under the Islamic principle of Musharakah(2008/2026), with a stable outlook.
PLUS SPV is an independent special-purpose company through which PLUS Expressways issues the Sukuk.'' Given the strong credit link between PLUS SPV and PLUS Expressways, via a purchase undertaking deed between them, the former's rating reflects the group's credit risk.
RAM Ratings said the rating reflects PLUS Expressways' strong business profile, anchored by its interests in several established domestic toll concessionaires (that is Projek Lebuhraya Utara-Selatan Bhd, Expressway Lingkaran Tengah Sdn Bhd, Konsortium Lebuhraya Butterworth-Kulim (KLBK) Sdn Bhd and Linkedua (Malaysia) Bhd. All of the group's domestic toll concessionaires have been delivering commendable traffic performances in the last few years.
For fiscal 2010, PLUS Expressways's company-level funds from operations debt coverage (FFODC) ratio came up to 0.70 times, supported by its strong operating cashflow of more than RM1 billion against a debt load of RM1.38 billion.
'PLUS Expressways's FFODC ratio is expected to come in at 0.58 times in fiscal 2011. Should the corporate restructuring be long drawn out, its FFODC ratio is expected to weaken to 0.27 times in fiscal 2012.
This is based on our assumption that all PLUS Expressways' toll concessionaires will not receive compensation for the 5-year freeze on toll rates; to date, PLUS Expressways' toll concessionaires have yet to be paid the outstanding balance of their compensation for 2010. RAM Ratings notes that it is imperative to conclude the restructuring exercise within the next few months; failure to do so would exert downward pressure on the Sukuk's rating,' it said.
RAM Rating Services Bhd said on Tuesday, Oct 18 that based on the current progress of the supplemental CAs, which are the key milestones for the entire exercise, the corporate restructuring is expected to be completed within the next few months.
It said that upon the completion of the restructuring exercise, the Islamic debt notes of RM4 billion Sukuk will be redeemed before its maturity and subsequently cancelled.
RAM Ratings had reaffirmed the AA1 rating of PLUS SPV Bhd's (PLUS SPV) Sukuk of up to RM4.0 billion in nominal value under the Islamic principle of Musharakah(2008/2026), with a stable outlook.
PLUS SPV is an independent special-purpose company through which PLUS Expressways issues the Sukuk.'' Given the strong credit link between PLUS SPV and PLUS Expressways, via a purchase undertaking deed between them, the former's rating reflects the group's credit risk.
RAM Ratings said the rating reflects PLUS Expressways' strong business profile, anchored by its interests in several established domestic toll concessionaires (that is Projek Lebuhraya Utara-Selatan Bhd, Expressway Lingkaran Tengah Sdn Bhd, Konsortium Lebuhraya Butterworth-Kulim (KLBK) Sdn Bhd and Linkedua (Malaysia) Bhd. All of the group's domestic toll concessionaires have been delivering commendable traffic performances in the last few years.
For fiscal 2010, PLUS Expressways's company-level funds from operations debt coverage (FFODC) ratio came up to 0.70 times, supported by its strong operating cashflow of more than RM1 billion against a debt load of RM1.38 billion.
'PLUS Expressways's FFODC ratio is expected to come in at 0.58 times in fiscal 2011. Should the corporate restructuring be long drawn out, its FFODC ratio is expected to weaken to 0.27 times in fiscal 2012.
This is based on our assumption that all PLUS Expressways' toll concessionaires will not receive compensation for the 5-year freeze on toll rates; to date, PLUS Expressways' toll concessionaires have yet to be paid the outstanding balance of their compensation for 2010. RAM Ratings notes that it is imperative to conclude the restructuring exercise within the next few months; failure to do so would exert downward pressure on the Sukuk's rating,' it said.
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