RAM reaffirms AA2 rating on SPG sukuk

KUALA LUMPUR: RAM Ratings has reaffirmed the long-term
rating of AA2 for Sarawak Power Generation Sdn Bhd’s (SPG) Serial Sukuk Musharakah programme of up to RM215 million.

In a statement, RAM said the long-term ratings have a stable outlook.

The rating remains supported by a strongly-worded letter of support from Syarikat SESCO Bhd, a Sarawak state electricity company and a wholly-owned subsidiary of Sarawak Energy Bhd.

RAM Rating’s sensitivity analysis showed that SPG was expected to generate a healthy average annual pre-financing cashflow of around RM42 million.

Going forward, it said, the company would optimise distribution to its shareholders while adhering to its financial covenants throughout the tenure of the sukuk.

Excessive distributions in the near-term, although allowed by the
distribution covenants, may weaken SPG’s debt coverage in the future, it said.

“Nevertheless, under our sensitised cashflow projection, which has factored in the abovesaid issues, the company’s debt servicing ability is anticipated to remain intact,” it added. — BERNAMA