Tuesday, Jun 28, 2005
MARC has assigned ratings of AA-ID (Double A Minus, Islamic Debt) to DRB-Hicom Berhad’s (DRB or Group) RM680 million Bai’ Bithaman Ajil Islamic Debt Securities and MARC-1ID/AA-ID to its RM200 million Underwritten Murabahah CP/MTN and RM120 million Murabahah CP/MTN facilities respectively. The assigned ratings reflect the Group’s diversified businesses – automotive manufacturing & distribution, property development & construction and services divisions; strong market position and presence in the local automotive industry and manageable debt leverage position.
The Group is currently the country’s single largest integrated automotive player with businesses spanning from manufacturing and assembly of cars and trucks to distribution and sales of passenger cars, trucks and motorcycles. It also undertakes component manufacturing, assembly of military vehicles, body building and the provision of auxiliary services.
Under the property development and construction division, DRB’s current flagship development is the Proton City development in Tanjung Malim, Perak. This development covers a 4,000-acre land which houses the second PROTON plant and the proposed RM1.8 billion Universiti Pendidikan Sultan Idris (UPSI) Main Campus. Other developments include Glenmarie Cove - a riverfront residential project and HICOM Pegoh Industrial Park in Melaka where the Honda plant is located. As for the services division, it encompasses a variety of synergy businesses including financial services, general and life insurances, vehicle inspection, airport ground handling provider and information technology.
Over the past four financial years, DRB’s revenue has been relatively stable within the RM4 billion mark; with the automotive manufacturing and distribution division contributing on average 48.3% of the revenue. MARC expects this division will continue to be the main driver of the Group given the current positive scenario of the local automotive sector.
The Group’s cash flow protection measures are strong, backed by cash and net deposits of RM1.17 billion as at end March 2005. DRB’s debt leverage level has been improving year-on-year as the Group continued to pare down its debts. As at 31 March 2005, the debt-to-equity ratio was 0.83 times with a total debt of RM2.75 billion. The pro-forma debt-equity ratio following the issuance of the RM1 billion Islamic facilities is 0.88 times as 82% of the proceeds will be utilized for refinancing existing borrowings.
The Group is currently the country’s single largest integrated automotive player with businesses spanning from manufacturing and assembly of cars and trucks to distribution and sales of passenger cars, trucks and motorcycles. It also undertakes component manufacturing, assembly of military vehicles, body building and the provision of auxiliary services.
Under the property development and construction division, DRB’s current flagship development is the Proton City development in Tanjung Malim, Perak. This development covers a 4,000-acre land which houses the second PROTON plant and the proposed RM1.8 billion Universiti Pendidikan Sultan Idris (UPSI) Main Campus. Other developments include Glenmarie Cove - a riverfront residential project and HICOM Pegoh Industrial Park in Melaka where the Honda plant is located. As for the services division, it encompasses a variety of synergy businesses including financial services, general and life insurances, vehicle inspection, airport ground handling provider and information technology.
Over the past four financial years, DRB’s revenue has been relatively stable within the RM4 billion mark; with the automotive manufacturing and distribution division contributing on average 48.3% of the revenue. MARC expects this division will continue to be the main driver of the Group given the current positive scenario of the local automotive sector.
The Group’s cash flow protection measures are strong, backed by cash and net deposits of RM1.17 billion as at end March 2005. DRB’s debt leverage level has been improving year-on-year as the Group continued to pare down its debts. As at 31 March 2005, the debt-to-equity ratio was 0.83 times with a total debt of RM2.75 billion. The pro-forma debt-equity ratio following the issuance of the RM1 billion Islamic facilities is 0.88 times as 82% of the proceeds will be utilized for refinancing existing borrowings.