Monday, Feb 09, 2004
MARC has assigned the ratings of MARC-2ID/AID to EP Manufacturing Bhd’s (EPMB) proposed RM150.0 million private debt securities (PDS). The ratings reflects the Group’s position as a Tier-1 parts vendor for the national carmaker, PROTON, via its subsidiary; PEPS-JV (M) Sdn Bhd (PEPS-JV). Moderating factors include the inherent risks of the automotive industry as well as its dependence on the sales performance of the national cars (i.e. Proton and Perodua) which contributed approximately 84% to the company’s revenue.
Going forward, EPMB’s prospects will be driven by its 79.5%-owned subsidiary PEPS-JV which is a tier-one supplier to Proton and Perodua. Other growth drivers include its 100%-owned subsidiary APS which has secured a Bosch contract to supply braking system to Proton, and its export markets whereby the group had recently secured a contract to design and manufacture components for a face-lift version of the Toyota Land Cruiser for the Middle East markets.
The PDS are secured by assignment of proceeds from Perusahaan Otomobil Nasional and Perodua Manufacturing Sdn Bhd into the Designated Accounts as well as a first rank charge over all Designated Accounts. The payment structure of PDS, with maturities on an annual basis (beginning on the second year of the issue), reduces the refinancing risk through the progressive redemption of the total debt over the term of the instrument.
Going forward, EPMB’s prospects will be driven by its 79.5%-owned subsidiary PEPS-JV which is a tier-one supplier to Proton and Perodua. Other growth drivers include its 100%-owned subsidiary APS which has secured a Bosch contract to supply braking system to Proton, and its export markets whereby the group had recently secured a contract to design and manufacture components for a face-lift version of the Toyota Land Cruiser for the Middle East markets.
The PDS are secured by assignment of proceeds from Perusahaan Otomobil Nasional and Perodua Manufacturing Sdn Bhd into the Designated Accounts as well as a first rank charge over all Designated Accounts. The payment structure of PDS, with maturities on an annual basis (beginning on the second year of the issue), reduces the refinancing risk through the progressive redemption of the total debt over the term of the instrument.