MARC Ratings has assigned preliminary ratings of A+_IS/A-_IS to WCT Holdings Berhad’s (WCT) proposed RM5.0 billion Islamic Medium-Term Notes (IMTN)/ Perpetual Sukuk Programmes. Concurrently, the rating agency affirmed the ratings on WCT’s existing programmes:

• RM1.0 billion Medium-Term Notes Programme at A+
• RM1.5 billion Sukuk Murabahah Programme at A+_IS
• Perpetual Subordinated Sukuk Musharakah Programme (Perpetual Sukuk) of up to RM1.0 billion at A-_IS

The outlook on all ratings is positive.

Proceeds from issuances under the proposed programmes will be used to fund working capital requirements and refinance existing borrowings. Following the injection of its three malls into Paradigm REIT, WCT’s leverage has improved, with consolidated borrowings declining to RM2.4 billion as at end-9M2025 from RM3.6 billion in 2024. WCT’s deleveraging efforts are expected to continue, through the group’s plan to inject its three hotels — Première Hotel Klang, Le Méridien Petaling Jaya and Hyatt Place Johor Bahru — into the REIT in 2H2026. Upon completion, borrowings are expected to reduce further to RM2.2 billion, with gross debt-to-equity (DE) and net DE ratios improving to 0.61x and 0.45x.

The property investment division will continue to generate income from REIT dividends and management fees, reflecting WCT’s effective 60.7% stake, alongside contributions from airport malls and hotel assets with improved occupancy.

The group’s intermediate-term earnings visibility is supported by unbilled property development sales of about RM1.1 billion and a construction order book of RM2.3 billion as at end-9M2025. WCT’s established market position and long operating track record in construction and property development underpin the rating affirmation. While order book replenishment has been limited, it is expected to improve given WCT’s proven ability to secure domestic and international contracts. In property development, ongoing key projects in Kuala Lumpur (WCity OUG) and Johor Bahru (Adison) support future earnings, with total gross development value of RM2.5 billion and an average take-up rate of 73% as at end-September 2025.

For 9M2025, group revenue grew by 17.7% y-o-y to RM1,507.5 million, mainly supported by stronger progress billings and sales of completed property inventory, as well as revenue from land sale. Operating cash flow rose to RM248.3 million (9M2024: RM52 million) driven by collection of REIT listing receivables and property development progress billings.