MARC has today placed WCT Holdings Bhd’s (WCT Holdings) debt and sukuk ratings on MARCWatch Developing. The rating action affects the RM1.0 billion 15-year MTN and RM1.5 billion 15-year Sukuk Murabahah Programmes whose ratings of AA- and AA-_IS respectively were affirmed with a negative outlook on October 7, 2015.

The MARCWatch Developing placement reflects the potential change in the credit profile arising from the change in control and existing management at WCT Holdings. MARC is of the view that the group’s asset monetization and net debt reduction plans may be subject to change by the new management.

WCT Holdings’ major shareholders and founding members including Managing Director, Taing Kim Hwa, have recently disposed their equity stakes totalling 19.7% to Dominion Nexus Sdn Bhd, a company that is substantially owned by Tan Sri Desmond Lim Siew Choon. Mr Taing has since resigned as the Managing Director of WCT Holdings and Tan Sri Desmond Lim has been appointed as Executive Chairman.

The ratings have been under pressure as a result of WCT Holdings’ high gearing level and diminished liquidity. MARC will assess the new management’s plans and their impact on the credit metrics which may improve, deteriorate or remain unchanged. MARC will seek to resolve the MARCWatch Developing once we have more clarity on the strategic initiatives of WCT Holdings to address our concerns regarding its high leverage and reduced liquidity.

Contacts:
Wan Abdul Muiz Wan Abdul Ghafar, +603-2082 2260/ muiz@marc.com.my;
Yap Lai Ken, +603-2082 2247/ laiken@marc.com.my.