May 17 2012
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RAM Ratings withdraws Kencana's ratings, assigns AA3 rating to SapuraKencana
Pursuant to the merger, the Sukuk Mudharabah has been novated to SapuraKencana; the latter has assumed the repayment responsibility on the Sukuk Mudharabah. Meanwhile, the proposed Sukuk Mudharabah-W has been aborted.
To recap, RAM Ratings reaffirmed the AA3 rating of the Sukuk Mudharabah on 23 March 2012, on the premise that the then-proposed merger would be successfully completed. Moving forward, the Group is expected to clinch more turnkey engineering, procurement, construction, installation, and commissioning projects on the international scene. SapuraKencana, along with other local providers of oil and gas support services, also benefits from the favourable policies implemented by the Government and Petroliam Nasional Berhad. On the flipside, we note that the Group shoulders a hefty debt burden, with considerable complexity when attempting to integrate the businesses of the 2 sizeable entities. For more details, please refer to RAM Ratings' rationale on Kencana, published on 30 March 2012.
Low Li May
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