TRIplc Medical missed construction completion milestone for its UiTM project

Published on 23 Apr 2020.

Share Tweet Email

TRIplc Medical Sdn Bhd (TRIplc Medical or the Company) has been tasked with the construction - including medical equipment supply and installation - plus asset management of a teaching hospital and academic complex at Universiti Teknologi MARA’s (UiTM) campus in Puncak Alam, Selangor (the Project). Its 25-year Concession Agreement (CA) inked on 18 February 2016 with UiTM and the Government of Malaysia (GoM, through the Ministry of Higher Education) includes a 36-month construction period. The Project’s construction cost is partially funded by TRIplc Medical’s RM639 mil Senior Sukuk Murabahah (2017/2035), rated AA1/stable by RAM. 

The Senior Sukuk’s rating is anchored by a four-year Al-Kafalah Facility of up to RM639 mil, including one profit payment, expiring on 22 October 2021 procured during the Project’s construction phase; this protects the Senior Sukuk holders against any delay and non-completion risk. The guarantee is provided by Danajamin Nasional Berhad and Bank Pembangunan Malaysia Berhad - both rated AAA/Stable/P1 by RAM - on a proportionate basis of RM319.5 mil each. It enhances the credit profile of the Senior Sukuk beyond its stand-alone credit strength during the construction phase. Upon the completion of the Project and the expiry of the Al-Kafalah Facility, the rating is anticipated to be supported by strong and timely cashflow, backed by TRIplc Medical’s CA with the GoM.

On 10 April 2020, the Project missed the 36-month completion milestone under its CA. While the Company had requested an Extension of Time (EoT) from UiTM and the GoM in late 2019 (as permitted under the CA if delays occurs owing to non-timely public authorities’ approval), no extension has been obtained to date. The EoT approval process has been partly held up by the present nationwide movement control order (MCO). Contractually, UiTM and the GoM can grant TRIplc Medical a six-month extension to rectify any failure or send the Company a default notice requiring a remedy within a specific period. Based on our interaction with TRIplc Medical, no extension or default notice has been issued by UiTM or the GoM to date.

Under the terms of the Sukuk Trust Deed, failure to complete the Project within the stipulated time as per the CA (without any EOT) is tantamount to an event of default (EoD). We understand that the sukukholders have yet to formally declare an EoD or issue a claim against the Kafalah providers. As of early March 2020, the Project was 94.55% completed. The targeted completion date is in October 2020 (in line with the Company’s requested six-month EoT application). Given the ongoing nationwide MCO since 18 March 2020, this is expected to be further delayed. 

We are currently undertaking an annual rating review of the Senior Sukuk and expect to finalise our assessment in the next month.


Analytical contact
Davinder Kaur Gill
(603) 3385 2525

Media contact
Padthma Subbiah
(603) 3385 2577


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2020 by RAM Rating Services Berhad

Ratings on TRIplc Medical Sdn Bhd