Thursday, Mar 06, 2003
MARC has assigned Islamic corporate debt ratings of MARC-2ID/AID (Islamic Debt) to Ranhill Berhad’s (‘Ranhill’) proposed partially underwritten RM300 million Murabahah Commercial Papers (MCP)/Medium Term Notes (MMTN) Programme.
The ratings reflect Ranhill’s competitive position in the engineering and construction business; good track record; and a tight underlying issue structure for the proposed partially underwritten MCP/MMTN Programme. The ratings are, however, limited by credit considerations including the inherent cyclicality of the construction industry and increased proforma debt leverage upon the issuance of the MCP/MMTN Programme.
Incorporated in May 1997, Ranhill undertook a restructuring exercise prior to its listing on the Kuala Lumpur Stock Exchange (KLSE) in February 2001. The Group is currently involved in the engineering, procurement, construction management, construction and operations and maintenance businesses, particularly in the oil & gas, infrastructure and utilities sub-sectors, carried out by its subsidiaries, namely Ranhill Bersekutu Sdn Bhd (RBSB), RB Ventures Sdn Bhd (RBV), Ranhill Civil Sdn Bhd (RC), Ranhill Engineers and Constructors Sdn Bhd (REC), Ranhill Sri Gading Sdn Bhd (RSG), Ranhill International Inc. (RII), Ranhill Worley Engineering Sdn Bhd (RWE), MediGlobal Malaysia Sdn Bhd (MG), Ranhill Worley Sdn Bhd (RWSB), Ranhill (India) Private Limited (RIPL), Urusan Teknologi Wawasan Sdn Bhd (UTW) and Ranhill Antara Koh Sdn Bhd (RAK), a subsidiary of RC.
To date, the Group’s total on-going projects amount to over RM2.08 billion, more than 80% of which were secured through negotiated contracts. Some of the projects currently undertaken by the Group include the construction of the Serdang Hospital, Muar Bypass,Petronas MLNG Tiga Slugcatcher and CV3 in Sarawak, Double-tracking Railway Line (Rawang to Ipoh) and Semangar Water Supply Scheme in Johor. The Group’s list of completed engineering and construction projects include part of the PETRONAS’ Twin-Towers, Kuala Lumpur International Airport (KLIA) and the North South-Expressway (Gurun-Sg. Petani-Butterworth).
Proceeds from the MCP/MMTN Programme will be mainly utilized to finance the Group’s working capital requirements, refinance certain existing borrowings and finance future investments.
The Programme will be issued in two tranches of RM200 million and RM100 million respectively; Tranche I will be utilized to finance general working capital requirements & refinance bank borrowings of the issuer and/or its subsidiaries and to finance future investments of the issuer and/or its subsidiaries, while Tranche II will be utilized to finance working capital requirements of specific projects (to be identified by the issuer and/or its subsidiaries). The drawdown of the second tranche is conditional upon Ranhill securing and assigning specific project(s) to the note holders. All MCPs issued will be fully underwritten, up to a maximum amount of RM120 million (which will be gradually reduced starting from the fifth year of the programme); thereby reducing the refinancing risk. Under the issue structure, three designated accounts will be established; Sinking Fund I Account (SFA I), Sinking Fund II Account (SFA II) and Proceeds Account. SFA I shall build-up funds on an annual basis based on the tenure of MMTNs issued, to ensure timely repayment of MMTNs issued under Tranche I. SFA II shall capture 15% of proceeds from the specific project(s) from the Proceeds Account which shall be jointly operated by the Security Agent and the issuer.
The Group’s profitability is primarily dictated by the contracts/projects secured and their margins. For fiscal year ended 30 June 2002 (FY2002), the Group’s revenue rose by 46.1% to RM620.75 million, compared to RM424.89 million in the previous corresponding period ended 30 June 2001 (FY2001). Pre-tax profit, meanwhile, escalated by 67% to RM82.86 million, from RM49.66 million in FY2001.
As at FY2002, the Group’s total borrowings stood at RM131.89 million, a 49.4% increase from RM88.30 million previously. This was mainly due to the increase in short term borrowings to RM61.06 million (FY2001: RM14.90 million). The increase in borrowings was, nevertheless, cushioned by a 31% increase in shareholders’ funds to RM206.52 million, resulting in a marginal increase in the Group’s debt leverage to 0.62 times (FY2001: 0.54 times). A debt-equity cap of 2.00 times has been imposed under the issue structure.
The ratings reflect Ranhill’s competitive position in the engineering and construction business; good track record; and a tight underlying issue structure for the proposed partially underwritten MCP/MMTN Programme. The ratings are, however, limited by credit considerations including the inherent cyclicality of the construction industry and increased proforma debt leverage upon the issuance of the MCP/MMTN Programme.
Incorporated in May 1997, Ranhill undertook a restructuring exercise prior to its listing on the Kuala Lumpur Stock Exchange (KLSE) in February 2001. The Group is currently involved in the engineering, procurement, construction management, construction and operations and maintenance businesses, particularly in the oil & gas, infrastructure and utilities sub-sectors, carried out by its subsidiaries, namely Ranhill Bersekutu Sdn Bhd (RBSB), RB Ventures Sdn Bhd (RBV), Ranhill Civil Sdn Bhd (RC), Ranhill Engineers and Constructors Sdn Bhd (REC), Ranhill Sri Gading Sdn Bhd (RSG), Ranhill International Inc. (RII), Ranhill Worley Engineering Sdn Bhd (RWE), MediGlobal Malaysia Sdn Bhd (MG), Ranhill Worley Sdn Bhd (RWSB), Ranhill (India) Private Limited (RIPL), Urusan Teknologi Wawasan Sdn Bhd (UTW) and Ranhill Antara Koh Sdn Bhd (RAK), a subsidiary of RC.
To date, the Group’s total on-going projects amount to over RM2.08 billion, more than 80% of which were secured through negotiated contracts. Some of the projects currently undertaken by the Group include the construction of the Serdang Hospital, Muar Bypass,Petronas MLNG Tiga Slugcatcher and CV3 in Sarawak, Double-tracking Railway Line (Rawang to Ipoh) and Semangar Water Supply Scheme in Johor. The Group’s list of completed engineering and construction projects include part of the PETRONAS’ Twin-Towers, Kuala Lumpur International Airport (KLIA) and the North South-Expressway (Gurun-Sg. Petani-Butterworth).
Proceeds from the MCP/MMTN Programme will be mainly utilized to finance the Group’s working capital requirements, refinance certain existing borrowings and finance future investments.
The Programme will be issued in two tranches of RM200 million and RM100 million respectively; Tranche I will be utilized to finance general working capital requirements & refinance bank borrowings of the issuer and/or its subsidiaries and to finance future investments of the issuer and/or its subsidiaries, while Tranche II will be utilized to finance working capital requirements of specific projects (to be identified by the issuer and/or its subsidiaries). The drawdown of the second tranche is conditional upon Ranhill securing and assigning specific project(s) to the note holders. All MCPs issued will be fully underwritten, up to a maximum amount of RM120 million (which will be gradually reduced starting from the fifth year of the programme); thereby reducing the refinancing risk. Under the issue structure, three designated accounts will be established; Sinking Fund I Account (SFA I), Sinking Fund II Account (SFA II) and Proceeds Account. SFA I shall build-up funds on an annual basis based on the tenure of MMTNs issued, to ensure timely repayment of MMTNs issued under Tranche I. SFA II shall capture 15% of proceeds from the specific project(s) from the Proceeds Account which shall be jointly operated by the Security Agent and the issuer.
The Group’s profitability is primarily dictated by the contracts/projects secured and their margins. For fiscal year ended 30 June 2002 (FY2002), the Group’s revenue rose by 46.1% to RM620.75 million, compared to RM424.89 million in the previous corresponding period ended 30 June 2001 (FY2001). Pre-tax profit, meanwhile, escalated by 67% to RM82.86 million, from RM49.66 million in FY2001.
As at FY2002, the Group’s total borrowings stood at RM131.89 million, a 49.4% increase from RM88.30 million previously. This was mainly due to the increase in short term borrowings to RM61.06 million (FY2001: RM14.90 million). The increase in borrowings was, nevertheless, cushioned by a 31% increase in shareholders’ funds to RM206.52 million, resulting in a marginal increase in the Group’s debt leverage to 0.62 times (FY2001: 0.54 times). A debt-equity cap of 2.00 times has been imposed under the issue structure.