Published on 19 Oct 2020.
RAM Ratings has assigned a final AA3/Stable rating to Solar Management (Seremban) Sdn Bhd’s (SMS) RM260 mil ASEAN Green SRI Sukuk (2020/2038) (the Sukuk). In assigning the final rating, RAM has reviewed all the relevant transaction documents and assumptions applied. We find them to be in line with our expectations when the preliminary ratings had been assigned (published on 2 September 2020). Please refer to our final rating rationale on SMS for further details on the assigned rating.
Under a 21-year Power Purchase Agreement (PPA) with Tenaga Nasional Berhad (TNB), SMS has been contracted to design, construct, own, operate and maintain a solar photovoltaic (PV) plant with a capacity of 50 MWac (the Plant) in Rembau, Negeri Sembilan. The Plant had been completed via a fixed-price, lump-sum turnkey contract with Mattan Engineering Sdn Bhd. It is among the winning contenders in the first cycle of Malaysia’s large-scale solar competitive bidding programme. The Plant achieved its commercial operations date (COD) on 30 January 2019. SMS uses polycrystalline PV modules manufactured by Hanwha Q Cells Malaysia Sdn Bhd, and central inverters produced by Sungrow Power Supply Co Ltd. Both are reputable and financially stable companies.
The Sukuk, equivalent to 80% of the total project cost, is to refinance SMS’s existing loan facility and shareholders’ loans to fund the construction of the Plant. SMS is a wholly owned subsidiary of Solar Management (Chembong) Sdn Bhd, which in turn is equally held by two individuals, Tee Cheng Hua and Rokiyati Binti Jumali. Tee and his family are primarily involved in the oil palm plantation business.
Yip Chee Meng
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Ratings on Solar Management (Seremban) Sdn Bhd