MARC said today that there will be no immediate rating impact on WCT Berhad’s (WCT) and its subsidiary Segi Astana Sdn Bhd’s rated facilities as a result of WCT’s proposed internal reorganisation exercise. 

The exercise is being undertaken to segregate WCT’s property development and investment operations from its construction business by forming a newly incorporated investment holding company WCT Holdings Sdn Bhd which will subsequently be converted into a public limited company WCT Holdings Bhd (WCTH). WCT’s entire shareholding in WCT Land Sdn Bhd (WCT Land), the property development arm of the group, will be transferred to WCTH, replacing the former parent-subsidiary relationship between WCT and WCT Land with a related-entity relationship. Upon completion of the exercise, which is expected by April 2013, WCT and WCT Land will be wholly-owned by WCTH, which would also assume WCT’s present listing status on the Main Board of Bursa Malaysia Securities Berhad.

MARC notes that WCT’s corporate debt facilities rated by MARC, which carry ratings of AA-/MARC-1/Stable, will be novated to WCTH. Although there is no immediate impact on the ratings of the debt facilities upon novation to WCTH, the rating agency is mindful that future funding decisions at holding company and its operating entities and/or additional indebtedness at subsidiaries’ levels could have a bearing on currently assigned ratings going forward.  

The AAA(fg)/Stable rating on Segi Astana’s Medium Term Notes Programme is premised on the rating of the guarantor Danajamin Nasional Berhad and would not be impacted by WCT’s stand alone credit profile.

Contacts:
Taufiq Kamal, +603-2082 2251/ taufiq@marc.com.my;
Rajan Paramesran, +603-2082 2233, rajan@marc.com.my.