WCT Land Berhad’s (“WCTL”) RM132 million Convertible Redeemable Debt Securities (“CRDS”) is upgraded from A to A+ (cg) with a stable outlook to reflect the strength of the corporate guarantee provided by its holding company, WCT Engineering Bhd (“WCTE”). WCTE’s RM100 million Islamic Fixed Rate Serial Bonds initial A+ rating assigned by MARC in June 2005 has been affirmed in August 2006. The rating is also supported by WCTL’s strengthening position as a property developer, stemming from the success of its Bandar Bukit Tinggi Township in Klang coupled with its consistent financial performance and cashflow generating capabilities. Moderating factors continue to be the cyclicality of the property market sector as demonstrated by the current softening property market, brought on by subdued house buyer demand.

Apart from the corporate guarantee provided by WCTE, WCTL has the added advantage of leveraging on WCTE’s management strengths and its sound performance record. WCTE has proven itself to be a reliable contractor, having completed major projects such as the Guthrie Corridor Expressway, Sepang F1 circuit and Bahrain international circuit, in a timely manner.

WCTL’s development focus remains in Klang. Its Bandar Bukit Tinggi (“BBT”) township comprising BBT 1, 2 and 3 has benefited from its strategic location at the crossroads of Southern Klang, Selangor; its accessibility via six major highways and the presence of two retail hypermarkets (Tesco and Giant). The encouraging response to WCTL’s newly launched BBT3, targeted at the medium to high end market, is a reflection of the company’s brand name, strong historical take-up rates for the mixed development and timely delivery to date.

The total development of the BBT township is expected to stretch over the next seven to eight years, thus ensuring a steady income stream for WCTL throughout the CDRS tenure. Additionally WCTL has been actively venturing into areas outside of Klang such as Kelana Jaya (mixed development) and Sutera Harbour, Kota Kinabalu an up-market residential development. To further improve its income streams, the group via its wholly owned subsidiary Gemilang Waras Sdn Bhd (“Gemilang”) recently entered into an Agreement to Lease with AEON CO (M) BHD (“AEON”). Under this agreement, Gemilang will build and lease the BBT2 shopping centre along Jalan Langat in Klang with a gross lettable area of approximately 1.0 million sq feet to AEON for an initial term of 10 years with a renewal option for a further 3 terms of 5 years each.

WCTL’s unutilised land bank is primarily concentrated in the Klang area and stood at approximately 769 acres as at May 2006. While its current unutilised land bank is expected to keep WCTL occupied for at least the medium term, the company is constantly on the look out for strategic properties to add to it.

WCTL continues to record an upward profit trend on the back of impressive sales from the BBT developments. Cashflow protection measures have also been improving in tandem. Going forward, BBT 1, BBT 2 and BBT 3 are expected to be the main revenue contributors throughout the tenure of the CRDS. The Group’s debt to equity level has remained below one time and is well within the covenanted cap of 2.5x.