MARC Ratings has affirmed its AA-_IS rating on Tanjung Bin O&M Berhad’s (TBOM) outstanding RM165.0 million Sukuk Wakalah with a stable outlook.

The rating reflects the credit strength of TBOM’s parent, Malakoff Power Berhad (MPower, AA-_IS/Stable) which has provided an unconditional and irrevocable undertaking to cover any finance service reserve account (FSRA) shortfall for the Sukuk Wakalah, as well as the strong operational and financial linkages between TBOM and MPower. MPower is a wholly-owned subsidiary of Malakoff Corporation Berhad (Malakoff) and provides operations and maintenance (O&M) services to Malakoff-majority-owned local independent power producers.

TBOM provides O&M services for sister company Tanjung Bin Power Sdn Bhd’s (TBP) 2,100MW power plant in Pontian, Johor, under an O&M Agreement (OMA). TBOM subcontracted part of these services to MPower under a sub-OMA. Both the OMA and sub-OMA are coterminous with the 25-year power purchase agreement between TBP and Tenaga Nasional Berhad (AAA/Stable).

TBOM generates most of its revenue from fixed and variable operating fees, the latter being tied to TBP’s net electricity output. Performance improved in 1H2025 following completion of the major maintenance programme in 2021–2024. Higher electricity output at TBP drove a 6.2% y-o-y increase in TBOM’s revenue, while the absence of major maintenance reduced operating costs and narrowed pre-tax loss to RM12.4 million. With no major maintenance planned until 2029, profitability is expected to continue improving on stable operations and lower maintenance requirements. As at end-September 2025, TBOM held RM56.7 million in cash, with the next sukuk principal repayment of RM60.0 million due on 1 July 2026.