MARC has placed Pinnacle Tower Sdn Bhd's RM50 million Islamic Commercial Papers (ICP) and RM400 million Islamic Medium-Term Notes (IMTN) of MARC-1IS and AAAIS ratings under review to evaluate the impact of a proposed 50.0% equity divestment by the State Financial Secretary of Sarawak (SFS) in Sacofa Sdn Bhd (Sacofa). Pinnacle Tower is a wholly-owned special purpose funding vehicle for Sacofa, which is responsible for constructing, owning and managing telecommunication towers as well as providing fibre-optic infrastructure in Sarawak.
The AAAIS rating of Pinnacle Tower incorporated a two-notch rating uplift for the implied Sarawak state support from Sacofa's standalone corporate credit rating of AA. The state government of Sarawak (SGS) is rated AAA/Stable by MARC and is currently in the process of divesting a 50.0% stake in Sacofa to Cahya Mata Sarawak Berhad (CMSB). With the potential divestment, SFS will have a direct holding of 20.5% in Sacofa and hence Sacofa will not be rated as a government-related entity (GRE).
If the proposed divestment receives the requisite noteholders' approval, MARC will likely reposition Pinnacle Tower's long-term rating at the same level as Sacofa's standalone corporate rating by removing the two-notch rating uplift currently incorporated in the parent's rating under the agency's rating methodology for GREs. The change in Sacofa's shareholding structure will result in Sacofa no longer falling within MARC's definition of a GRE. MARC will monitor developments with regard to the aforementioned proceedings and will take appropriate rating action. The pending revision will affect the RM90.0 million of outstanding notes under the programme.
-Ends-
Contacts
Nicola Tan, +603-2082 2262
nicola@marc.com.my
Yap Lai Ken
+603-2082 2247
laiken@marc.com.my.
[This announcement is available in the MARC corporate homepage at www.marc.com.my]
---- DISCLAIMER ----
This communication is provided by Malaysian Rating Corporation Berhad ("MARC") on the basis of information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.
© 2015 Malaysian Rating Corporation Berhad
© Press Release 2015
