MARC has reaffirmed the rating of Kuala Lumpur Sentral Sdn Bhd’s (KLSSB) tranches 2A, 2B, 3, 4A & 4B BaIDS totaling RM800 million at AID(s), reflecting the support provided by Bank Pembangunan & Infrastruktur Malaysia Berhad (BPIMB) by way of a standby revolving credit facility.

Kuala Lumpur Sentral’s commercial development is divided into four phases. As at May 2005, the aggregate confirmed sales stood at RM854.5 million, of which RM91.9 million remained outstanding. Revenue of RM75.9 million recorded for the first 5 months of 2005 was mainly attributable to sales made from its Plaza Sentral II strata offices.

However, KLSSB recorded a loss before tax of RM7.0 million for the same period, as compared to last year’s profit position (2004: profit RM2.0 million). The Pre-tax result was affected by the high cost of sales (which had included the substructure costs for Plaza Sentral Phase II) coupled with the high financing costs (related to the BaIDS facility). As a consequence of the foregoing, KLSSB’s operational cash flow position deteriorated and remained weak generally due to the high borrowing costs.

KLSSB’s projected cash flow is susceptible to delays in meeting projected future sales, thus, affecting the principal repayments of RM80 million and RM200 million due in 2006 and 2007 respectively. The support from BPIMB is pivotal in ensuring the timely payment of the remaining BaIDS facility.