Friday, Oct 18, 2002
Melombong dan Perumahan Sdn Bhd’s (MDP) rating of MARC-2ID is reaffirmed, reflecting the strength of the issue structure which captures the sales proceeds of the Ultima I and II condominiums and low cost apartments to form the primary source of repayment of the debt issue. This is further strengthened by the good sales performance of both the Ultima condominiums and low cost units. The specific assignments of the Sinking Fund Account (SFA), Housing Developer’s Accounts (HDA) and non-HDA Account to the trustee afford further protection to noteholders. The reduction in the facility limit to RM20 million vis-à-vis the remaining billings of RM34.5 million; provides a security cover of 1.7 times as at end-March 2002.
MDP is the developer of Bandar Baru Ampang, situated to the south of Old Ampang Town, Selangor. It is developing the last two plots of land, consisting the Ultima condominiums and low cost apartments. The Ultima condominium development consists two 144-unit condominium blocks with total gross development value (GDV) of RM45.6 million. As at 24 March 2002, MDP recorded almost 100% sales. In the meantime, the 1,920 units of low cost apartments have achieved 96% sales; therefore substantially mitigating the market risk. MDP is confident of selling the remaining 4%, upon receiving the qualified purchasers’ name list from the state government. The sale proceeds from these two developments have been earmarked for the sole purpose of redeeming the MUNIF.
The Ultima condominiums have been handed over to owners. Construction of the low cost apartments, on the other hand slowed down due to the shortage of construction workers as a result of the deportation of illegal Indonesian immigrants. The relaxation of the ban on the illegal workers by the government is expected to expedite the construction works for the project. Work is now expected to be completed in November 2002. As at March 2002, the development is 54% completed. MARC believes that the delay would not affect the scheduled full repayment of the MUNIF by June 2003.
Aggregate remaining billings and sales of RM34.5 million and RM3.3 million respectively as at 24 March 2002 provide ample security coverage for the MUNIF facility limit of RM20 million. Investment risk is minimal, as funds in the SFA are only invested in government treasury bills/securities, fixed deposits with licensed financial institutions and fixed income securities with at least AA- (double A minus) rating or its equivalent.
The financial performance of MDP deteriorated further in fiscal year 2002, due to lower profit margin from the development of low cost apartments and the re-measure of piling works for Ultima I & II, which resulted in higher cost of sales. All major profitability measures declined following the unfavourable financial performance in fiscal year 2002. Debt leverage is, however, still within a manageable level of 0.6 times.
Investment leverage rose further to 173% from 167% in FY2001; reflecting shareholders’ funds growing exposure to credit risk associated with advances to related companies. Liquidity risk remains significant with advances to other companies within the Talam group forming 79% of total current assets. However, noteholders’ interests are protected with the repayment of the MUNIF to be met specifically from the sales proceeds of the Ultima condominiums and low cost apartments.
MDP is the developer of Bandar Baru Ampang, situated to the south of Old Ampang Town, Selangor. It is developing the last two plots of land, consisting the Ultima condominiums and low cost apartments. The Ultima condominium development consists two 144-unit condominium blocks with total gross development value (GDV) of RM45.6 million. As at 24 March 2002, MDP recorded almost 100% sales. In the meantime, the 1,920 units of low cost apartments have achieved 96% sales; therefore substantially mitigating the market risk. MDP is confident of selling the remaining 4%, upon receiving the qualified purchasers’ name list from the state government. The sale proceeds from these two developments have been earmarked for the sole purpose of redeeming the MUNIF.
The Ultima condominiums have been handed over to owners. Construction of the low cost apartments, on the other hand slowed down due to the shortage of construction workers as a result of the deportation of illegal Indonesian immigrants. The relaxation of the ban on the illegal workers by the government is expected to expedite the construction works for the project. Work is now expected to be completed in November 2002. As at March 2002, the development is 54% completed. MARC believes that the delay would not affect the scheduled full repayment of the MUNIF by June 2003.
Aggregate remaining billings and sales of RM34.5 million and RM3.3 million respectively as at 24 March 2002 provide ample security coverage for the MUNIF facility limit of RM20 million. Investment risk is minimal, as funds in the SFA are only invested in government treasury bills/securities, fixed deposits with licensed financial institutions and fixed income securities with at least AA- (double A minus) rating or its equivalent.
The financial performance of MDP deteriorated further in fiscal year 2002, due to lower profit margin from the development of low cost apartments and the re-measure of piling works for Ultima I & II, which resulted in higher cost of sales. All major profitability measures declined following the unfavourable financial performance in fiscal year 2002. Debt leverage is, however, still within a manageable level of 0.6 times.
Investment leverage rose further to 173% from 167% in FY2001; reflecting shareholders’ funds growing exposure to credit risk associated with advances to related companies. Liquidity risk remains significant with advances to other companies within the Talam group forming 79% of total current assets. However, noteholders’ interests are protected with the repayment of the MUNIF to be met specifically from the sales proceeds of the Ultima condominiums and low cost apartments.