Thursday, Jul 07, 2005
MARC has affirmed WCT Land Bhd’s (WCTL) long-term rating at AID in respect of the RM132 million Convertible Redeemable Debt Securities (CRDS) reflecting the Group’s reputable position as a property developer coupled with its strong financial performance and promising cashflow generating capabilites. The moderating factor continues to be the vulnerability of the projects to adverse developments in the property market.
WCTL was listed on the Main Board of Bursa Malaysia Securities Berhad in December 2004 and is primarily involved in property development activities with ancillary income from its property investment and investment holding activities. The success of its maiden property development, Bandar Bukit Tinggi (BBT) comprising of BBT 1 and 2 is due to its prime location, strategically located at the crossroads of southern Klang, Selangor; its accessibility by six major highways and the presence of two retail hypermarkets (Tesco and Giant). The encouraging response to WCTL’s newly launched BBT 3 which is targeted at the medium to high end market is a reflection of the favourable demand and strong historical take-up rates for the mixed development and the Group’s timely delivery of quality properties.
BBT 2 and 3 are expected to support WCTL’s revenue base until the year 2009 and 2012 respectively on the back of substantial locked-in sales and the expected positive and sustainable demand for the BBT developments. Consequently, BBT 2 has been identified as the primary source of repayment of the CRDS. MARC also expects cash flow protection measures to remain adequate throughout the tenure of the facility. The Group’s debt equity level has remained below one time and is well within the CRDS’s financial covenant of 2.5x.
A further positive rating factor is the provision of a corporate guarantee by WCTL’s parent company WCT Engineering Berhad in relation to the redemption of the CRDS.
WCTL was listed on the Main Board of Bursa Malaysia Securities Berhad in December 2004 and is primarily involved in property development activities with ancillary income from its property investment and investment holding activities. The success of its maiden property development, Bandar Bukit Tinggi (BBT) comprising of BBT 1 and 2 is due to its prime location, strategically located at the crossroads of southern Klang, Selangor; its accessibility by six major highways and the presence of two retail hypermarkets (Tesco and Giant). The encouraging response to WCTL’s newly launched BBT 3 which is targeted at the medium to high end market is a reflection of the favourable demand and strong historical take-up rates for the mixed development and the Group’s timely delivery of quality properties.
BBT 2 and 3 are expected to support WCTL’s revenue base until the year 2009 and 2012 respectively on the back of substantial locked-in sales and the expected positive and sustainable demand for the BBT developments. Consequently, BBT 2 has been identified as the primary source of repayment of the CRDS. MARC also expects cash flow protection measures to remain adequate throughout the tenure of the facility. The Group’s debt equity level has remained below one time and is well within the CRDS’s financial covenant of 2.5x.
A further positive rating factor is the provision of a corporate guarantee by WCTL’s parent company WCT Engineering Berhad in relation to the redemption of the CRDS.