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LEKAS allays concerns over Junior Sukuk default risk with extended maturity
Published on 16 Jun 2023.
RAM Ratings has affirmed the C2/Negative rating of Lebuhraya Kajang-Seremban Sdn Bhd’s (LEKAS or the Company) RM633 mil Junior Sukuk Istisna’ (2007/2025). The Company recently obtained an extension for a repayment due on the Junior Sukuk from the original scheduled payment date of 12 June 2023 to 31 July 2023.
Meanwhile, LEKAS is awaiting lenders’ approval of a request to extend the maturity of its RM460 mil Redeemable Convertible Secured Islamic Debt Securities (RCSIDS) to the same date. The C2/Negative rating continues to reflect a high likelihood of default owing to LEKAS’s tight liquidity position and lumpy debt repayment.
Both the Junior Sukuk and RCSIDS are set to be refinanced by a term loan, for which LEKAS has received a Letter of Offer from a financial institution. Although delayed, management aims to conclude the ongoing restructuring of the Company’s outstanding debt facilities by end-July 2023. Completion of the exercise without significant credit or economic loss is critical to averting a payment default on the Junior Sukuk. To that end, we have observed significant progress to date with no indication of adverse developments that could jeopardise full debt repayment to existing lenders. This is indicative of the related parties’ commitment to ensuring LEKAS’s debts are successfully restructured. We will continue to monitor the transaction closely and make necessary updates as required.
LEKAS holds the concession for the 44 km Kajang-Seremban Highway.
Analytical contacts
Seri Nuralya Munawir
(603) 3385 2484
nuralya@ram.com.my
Davinder Kaur Gill
(603) 3385 2525
davinder@ram.com.my
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Published by RAM Rating Services Berhad
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