Published on 19 Dec 2019.
RAM Ratings has reaffirmed the AA1/Stable rating of Teknologi Tenaga Perlis Consortium Sdn Bhd’s (TTPC or the Company) RM835 mil Sukuk Murabahah (2013/2023). The rating reflects TTPC’s sturdy business profile, which is underpinned by the favourable terms of its power purchase agreement (PPA) with sole off-taker Tenaga Nasional Berhad (TNB), the steady operating track record of the Company’s plant and its robust debt-servicing ability. TTPC owns and operates a 650 MW combined-cycle, gas-turbine power plant in Kuala Sungai Baru, Perlis (the Plant), under a 21-year PPA with TNB, which will expire on 31 March 2024.
We derive further comfort from the strong credit profile of TNB, which is rated AAA/Stable by RAM. As with other independent power producers, TTPC’s issue rating is moderated by inherent regulatory and single-project risks.
We note that TTPC has been able to earn full available capacity payments and has been operating within the PPA’s unscheduled outage rate limit of 6% since the Plant’s commissioning. Additionally, the Company has been able to consistently and fully pass through its fuel costs to TNB, underscored by the Plant’s efficiency.
Based on RAM’s sensitised analysis, TTPC is anticipated to generate an average annual pre-financing cashflow of about RM217 mil throughout the remaining tenure of the Sukuk. This translates into a strong minimum finance service coverage ratio of 1.80 times (with cash balances, post-distribution). Our cashflow analysis assumes that TTPC will pay optimum dividends while adhering to its financial covenants throughout the Sukuk’s tenure on a forward-looking basis, as opposed to only in the year of assessment.
Meanwhile, Jati Cakerawala Sdn Bhd – TTPC’s major shareholder – relies on distributions from the Company to meet its financial obligations under the former’s RM540 mil Sukuk Murabahah (2013/2023), rated A1/Stable by RAM.
Irfan Afifah Mohd Zaki
(603) 3385 2551
(603) 3385 2577
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Ratings on Teknologi Tenaga Perlis Consortium Sdn Bhd