KUALA LUMPUR: MARC Ratings has rated UMW Holdings Bhd (UMW) sukuk programmes on MARCWatch Developing.
The proposed sale of Permodalan Nasional Bhd's (PNB) 61.18 per cent equity ownership in UMW to Sime Darby Enterprise Sdn Bhd (SDESB) for about RM3.57 billion caused the rating action.
The rating agency said that if the proposed deal becomes unconditional, an obligatory general offer will be made to buy the remaining 38.82 percent, after which UMW is expected to be delisted.
UMW has an RM2.0 billion Islamic Medium-Term Notes Programme (Sukuk Musharakah) and an RM2.0 billion Perpetual Sukuk Programme, both of which MARC Ratings has affirmed their AA+IS and AA-IS ratings with a stable outlook in July 2023.
Among the rating considerations assessed were UMW's dominant market position in the local automobile industry, as well as its solid financial performance and stable balance sheet.
The ratings also incorporated a one-notch uplift based on implicit support from PNB. In resolving the developing placement, MARC Ratings will revisit the support assessment factor as the proposed sale will result in SDESB becoming a direct shareholder of UMW, it said in a statement today.
The rating agency is mindful that SDESB is wholly owned by Sime Darby Berhad, in which PNB is a key shareholder, and that the acquisition of UMW will significantly strengthen Sime Darby's competitive position in the automotive industry.
MARC Ratings understands that Sime Darby has plans to pare down UMW's borrowings. It will also analyse the full credit implications for UMW's operations and the changes in business profile from the proposed sale.
MARC Ratings will complete its rating assessment in tandem with the completion of the proposed transaction.
The current outstandings under the rated programmes are RM1.25 billion in Sukuk Musharakah and RM1.1 billion in Perpetual Sukuk.