MARC Ratings has affirmed its AA-_IS rating on ANIH Berhad’s RM2.5 billion Senior Sukuk Musharakah Programme and revised its outlook to stable from negative. The previous negative outlook was due to uncertainty surrounding the timing of Unit Kerjasama Awam Swasta’s (UKAS) approval on ANIH’s shareholding structure. Previously, MARC Ratings stated that the outlook would be revised to stable once the change in ownership is approved and there is clear progress in ANIH’s refinancing plan for the outstanding sukuk. 

Since MARC Ratings’ last rating action in February 2024, ANIH has obtained the approval from UKAS on March 15, 2024, for the change in shareholding, which will see Tan Sri Dr Azmil Khalili Khalid — via wholly-owned special purpose vehicle AFA Infrastructure and Development Sdn Bhd (AFA) — increasing his stake in ANIH from 49% to 100%. The acquisition is currently pending fulfilment of conditions precedent but is expected to be finalised by early 3Q2024. 

ANIH is the toll concessionaire for the 60-km Kuala Lumpur-Karak Highway (KL-Karak) and the 174.5-km East Coast Expressway Phase 1 (ECE1). On November 17, 2022, the company signed its sixth Supplemental Concession Agreement (SCA6) with the government, which extends its concession period from 2032 to 2069. The SCA6 also requires ANIH to undertake lane widening and flood mitigation works, with construction costs estimated at RM2.3 billion.

Once AFA’s acquisition of ANIH is complete, ANIH can finally progress with its refinancing exercise. The rating agency understands that there is already in place a comprehensive financing plan for: (1) AFA to acquire ANIH; (2) ANIH to early redeem the Senior Sukuk Musharakah (Proposed New Financing Facility, split into Tranche 1 and Tranche 2); and (3) ANIH to fund capex related to the lane widening and flood mitigation works at KL-Karak and ECE1 pursuant to the SCA6. 

MARC Ratings understands that prior to the early redemption of the sukuk, up to RM85 million is expected to be disbursed under Tranche 1 of ANIH’s Proposed New Financing Facility for preliminary works to meet the concessionaire’s obligations under the SCA6. Any amount disbursed under the said Tranche 1 (expected by mid-4Q2024) shall be subordinated to the Senior Sukuk Musharakah. Proceeds from Tranche 2 will be used to early redeem the Senior Sukuk Musharakah (outstanding RM1.1 billion after November 2024), likely to be by 4Q2024.