MARC has assigned a rating of MARC-1ID (cg) and AA-ID (cg) to Harum Intisari Sdn Bhd’s (HISB) Al-Murabahah Commercial Papers (MCP) and Medium Term Notes (MMTN) (collectively known as the Programme) of up to a nominal value of RM300 million. The rating reflects the unconditional and irrevocable corporate guarantee given by Gamuda Bhd (Gamuda), a leading construction company in Malaysia with shareholders’ funds of over RM2.0 billion.

Gamuda has been listed on the Main Board of Bursa Malaysia since 1992. The group’s major business activities are civil engineering & construction, manufacturing, property development, toll roads and privatisation of water projects. In FY2004, Gamuda recorded another excellent year of performance on the back of improvements achieved by all segments. Against this backdrop, the group posted a growth of 19% and 17% in revenue (FY2004: RM1.7 billion) and net profit (FY2004: RM283 million) respectively.

HISB, a wholly-owned subsidiary of Gamuda, is the developer of Bandar Botanic, an integrated township with mixed developments of semi-detached houses, bungalows, super link homes, double storey terrace homes, apartments and commercial units. The GDV for launched and future phases amounted to RM1.2 billion and
RM1.8 billion respectively. Strategically located within Klang, Bandar Botanic is well served by a network of highways such as Federal Highway, North-Klang Valley Expressway and North-South Expressway Central Link. Since its launch, Bandar Botanic has been well-received with an average take-up rate of 92%.

HISB’s revenue is mainly attributable to the housing development of Bandar Botanic. The overall demand for the phases launched had been encouraging with several launches recording take-up rates in excess of 90%. Take up rates for its future launches are expected to be favourable, based upon historical take-up rates in previous launching and the current encouraging secondary market within the vicinity. Operating profit margins for HISB remained stable, hovering around 12%-15%.

HISB’s historical debt level is good considering that debt leverage for property developers ranges between 1.0 – 1.5 times. However, pro-forma debt leverage after taking into account the additional RM300 million debt (based on shareholders’ fund as at FYE2004) stands at 1.32 times.

The proceeds from the Programme will be utilised towards refinancing of HISB’S existing debts, shareholder’s advances, and/ or any securities issued by HISB to shareholders, for general working capital purposes and for other general funding requirements including the purchases of land.