MARC has reaffirmed the AAAID rating of Gas District Cooling (Putrajaya) Sdn Bhd’s (GDC Putrajaya) RM300 million Al-Bai Bithaman Ajil Islamic Debt Securities (BaIDS). The rating reflects the strength of the project which in turn draws its strength from the assured demand for the supply of chilled water from the Government offices in Putrajaya; the integrated nature of the project owing to the strong backing from its ultimate shareholder, Petroliam Nasional Berhad (“PETRONAS”), in the form of timely and adequate capital support; as well as the minimal credit risk involved in the project since the offtakers are the Government of Malaysia and Putrajaya Holdings Sdn Bhd. GDC Putrajaya operates and maintains District Cooling System plants in Putrajaya, governed by a 22-year Concession Agreement requiring GDC Putrajaya to produce and supply chilled water to government premises located in Putrajaya.

GDC Putrajaya recorded revenue growth of more than 50% in FY2005 and contribution from the demand charge (based on a predetermined contractual cooling load demand) made up about 76% of total revenue. In FY2005, revenue from demand charge increased substantially by 70% on the back of increasing businesses experienced by GDC Putrajaya following the rise in the number of customers. The significant top line growth outpaced the growth in the cost of sales resulting in the narrowing of the operating loss before interest and tax to RM4.3 million.

Despite the losses, PETRONAS remains committed in providing adequate financial support to GDC Putrajaya. In FY2005, GDC Putrajaya issued new ordinary shares and non-cumulative preference shares totalling RM21.3 million and RM7.1 million respectively to PETRONAS. The holding company’s involvement in providing adequate and timely financial capital ensures GDC Putrajaya’s ability in meeting the financial covenants required in the issue structure.