Thursday, Jan 29, 2004
MARC has assigned the ratings of A+ID to Glomac Berhad’s (Glomac) RM50.0 million Senior Bai’ Bithaman Ajil Islamic Bonds (Senior BaIDS); AID to RM60.0 million Junior Bai’ Bithaman Ajil Islamic Bonds (Junior BaIDS); and MARC-2/AID to RM25.0 million Murabahah Notes Issuance Facility/Islamic Medium Term Notes (MUNIF/IMTN). The ratings are supported by Glomac’s position as one of the reputable property developers in Malaysia; its historically strong financial profile and anticipated strong revenue generation from property developments in Selangor and Johor. The Senior BaIDS’ rating reflects the backing of secured sales under three property development projects and the priority ranking provided to the Senior BaIDS in respect of monies from the said developments.
Glomac has been in the property development business since 1988 and is the developer of several of the landmark buildings in Kelana Jaya namely Glomac Business Centre, Kelana Business Centre and Kelana Centre Point. To date, Glomac has achieved total sales of RM1.8 billion in respect of all of its completed projects comprising residential and commercial units. Currently, its on-going projects (i.e. Aman Suria Damansara, Saujana Utama II and Sri Saujana) have a total gross development value of RM1.2 billion, whilst its future projects in Puchong, Rawang, Sungai Buloh and Kelana Jaya are expected to rake in sales amounting to RM1.9 billion over the next five to six years. Glomac’s revenue grew by 24.1% to RM212.7 million in FY2003, underpinned by the launch of its Aman Suria development and continued progress billings of property sales under Saujana Utama, Saujana Utama II and Sri Saujana developments. Operating profit margin averaged a respectable 19.1% over the past five fiscal years.
Under the issue structure, secured and future sales from specific phases in Aman Suria Damansara, Saujana Utama II and Sri Saujana will serve as the source of repayment for the Senior BaIDS. Receivables from secured sales provide a security cover of 4.0 times over the Senior BaIDS. And if future sales from these developments are included, the security cover will rise to 4.6 times. The issue structure also provides the Senior BaIDS holders first priority ranking over the utilization of funds from the identified projects. The Senior BaIDS primary notes shall be fully redeemed before the redemption of the Junior BaIDS commences.
Glomac’s debt leverage is considered moderate, averaging 0.6 times over the past four fiscal years. Upon issuance of the Islamic PDS, the pro-forma debt-to-equity ratio is expected to be 0.5 times after taking into account the additional capital of RM35.0 million from the private placement exercise which is expected to be completed by January 2004. In respect of the company’s debt servicing capability, it is expected to be strong with an average and minimum projected debt service coverage ratio of 6.7 times and 2.9 times respectively.
Glomac has been in the property development business since 1988 and is the developer of several of the landmark buildings in Kelana Jaya namely Glomac Business Centre, Kelana Business Centre and Kelana Centre Point. To date, Glomac has achieved total sales of RM1.8 billion in respect of all of its completed projects comprising residential and commercial units. Currently, its on-going projects (i.e. Aman Suria Damansara, Saujana Utama II and Sri Saujana) have a total gross development value of RM1.2 billion, whilst its future projects in Puchong, Rawang, Sungai Buloh and Kelana Jaya are expected to rake in sales amounting to RM1.9 billion over the next five to six years. Glomac’s revenue grew by 24.1% to RM212.7 million in FY2003, underpinned by the launch of its Aman Suria development and continued progress billings of property sales under Saujana Utama, Saujana Utama II and Sri Saujana developments. Operating profit margin averaged a respectable 19.1% over the past five fiscal years.
Under the issue structure, secured and future sales from specific phases in Aman Suria Damansara, Saujana Utama II and Sri Saujana will serve as the source of repayment for the Senior BaIDS. Receivables from secured sales provide a security cover of 4.0 times over the Senior BaIDS. And if future sales from these developments are included, the security cover will rise to 4.6 times. The issue structure also provides the Senior BaIDS holders first priority ranking over the utilization of funds from the identified projects. The Senior BaIDS primary notes shall be fully redeemed before the redemption of the Junior BaIDS commences.
Glomac’s debt leverage is considered moderate, averaging 0.6 times over the past four fiscal years. Upon issuance of the Islamic PDS, the pro-forma debt-to-equity ratio is expected to be 0.5 times after taking into account the additional capital of RM35.0 million from the private placement exercise which is expected to be completed by January 2004. In respect of the company’s debt servicing capability, it is expected to be strong with an average and minimum projected debt service coverage ratio of 6.7 times and 2.9 times respectively.