Thursday, Jan 19, 2006
MARC has reaffirmed Puncak Niaga (M) Sdn Bhd’s (“PNSB”) RM1.02 billion Bai Bithaman Ajil Islamic Debt Securities (“BaIDS”) and RM350 million Murabahah Commercial Papers/ Murabahah Medium Term Notes ratings of AAID and MARC-1ID/AAID respectively. The reaffirmation of the ratings is due to PNSB’s improved liquidity profile underpinned by the settlement of the long outstanding receivables. Furthermore, the completion of the privatisation of the Selangor water supply services is in our opinion a step forward for the water industry. More importantly it has had a positive impact on PNSB in terms of the prompt payments received by the company for the sale of treated water.
On 15 December 2004, Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”), Federal Government and the Selangor State Government entered into a Concession Agreement for the privatisation of the water supply services in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. Under the agreement, SYABAS took over the responsibilities of Perbadanan Urus Air Selangor Berhad (“PUAS”) in supplying treated water beginning 1 January 2005. Since the privatisation, PNSB has not faced any collection problems from SYABAS and this has helped to improve PNSB’s cash flow. Furthermore, the improvement in PNSB’s liquidity profile was also assisted by the resolution of the old outstanding receivables owed by PUAS. To-date, PNSB has received a total of RM699.6 million and an additional RM518.6 million will be repaid by SYABAS in 10 annual instalments beginning 2006.
On 19 October 2005, the BaIDS holders gave their consent to PNSB to extend the tenures of the BaIDS. The proposal to vary the existing principal terms and conditions allows the holders the opportunity to call for an early repayment under the Put Option granted to the holders of the BaIDS by PNSB.
Looking ahead, PNSB’s cash flow from operations is projected to be strong with the average Debt Service Cover Ratio (“DSCR”) comfortably above 1.25x with the minimum DSCR expected to occur in FY2016. The exercise of the Put Options on Series 3, 4, 5 and 6 of the BaIDS in FY2007, FY2008, FY2009 and FY2010 respectively is not expected to severely impact PNSB’s DSCR. The repayment of these series will also coincide with the exercise period of the Put Option for the RM546.9 million Junior Notes A.
On 15 December 2004, Syarikat Bekalan Air Selangor Sdn Bhd (“SYABAS”), Federal Government and the Selangor State Government entered into a Concession Agreement for the privatisation of the water supply services in the State of Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. Under the agreement, SYABAS took over the responsibilities of Perbadanan Urus Air Selangor Berhad (“PUAS”) in supplying treated water beginning 1 January 2005. Since the privatisation, PNSB has not faced any collection problems from SYABAS and this has helped to improve PNSB’s cash flow. Furthermore, the improvement in PNSB’s liquidity profile was also assisted by the resolution of the old outstanding receivables owed by PUAS. To-date, PNSB has received a total of RM699.6 million and an additional RM518.6 million will be repaid by SYABAS in 10 annual instalments beginning 2006.
On 19 October 2005, the BaIDS holders gave their consent to PNSB to extend the tenures of the BaIDS. The proposal to vary the existing principal terms and conditions allows the holders the opportunity to call for an early repayment under the Put Option granted to the holders of the BaIDS by PNSB.
Looking ahead, PNSB’s cash flow from operations is projected to be strong with the average Debt Service Cover Ratio (“DSCR”) comfortably above 1.25x with the minimum DSCR expected to occur in FY2016. The exercise of the Put Options on Series 3, 4, 5 and 6 of the BaIDS in FY2007, FY2008, FY2009 and FY2010 respectively is not expected to severely impact PNSB’s DSCR. The repayment of these series will also coincide with the exercise period of the Put Option for the RM546.9 million Junior Notes A.