RAM Ratings reaffirms rating of EKVESB’s sukuk

KUCHING: RAM Ratings has reaffirmed the AAA( bg)/ Stable rating of EKVE Sdn Bhd’s ( EKVESB) Guaranteed Sukuk Murabahah Facility of up to RM1,000 million in Nominal Value, premised on the irrevocable and unconditional guarantees extended by AAArated Maybank Islamic Bhd and Bank Pembangunan Malaysia Bhd.

EKVESB is the concessionaire of the East Klang Valley Expressway ( EKVE), a 36.16km closed-toll system which will start from Sungai Long in Kajang and terminate at Ukay Perdana in Ampang, under a 50year concession agreement (CA) with the Government of Malaysia (GoM).

“The construction of the EKVE continued to face delays owing to environmental and weather-related issues that are still hindering the construction progress of the expressway.

“That said, EKVESB expects the project to be completed within its original 48-month timeline, which is, by September 2019, and within the RM1.55 billion budgeted cost.

“We have, however, factored a one-year delay into our sensitised cashflow projections, with a five per cent cost overrun as a conservative measure. Under such a situation, EKVESB’s sole shareholder, Ahmad Zaki Resources Bhd has provided an undertaking to cover any potential cost overruns (including higher thanstipulated land acquisition costs) to enable EKVESB to meet its financial covenants, and to assist the company in honouring its financial obligations under the sukuk,” the ratings agency said.