MARC Ratings is providing this update on ANIH Berhad in connection with the concessionaire’s new supplemental concession agreement (SCA) with the government. The SCA follows ANIH’s existing concession agreement on Kuala Lumpur-Karak Highway (KL-Karak) and Phase 1 of East Coast Expressway (ECE1) expiring in 2032. ANIH currently has an outstanding RM1.48 billion sukuk under the existing RM2.5 billion Senior Sukuk Musharakah Programme on which MARC Ratings affirmed its AAIS/Stable rating on November 9, 2022.
The rating agency notes that no material development has taken place since the execution of the SCA on November 17, 2022, and understands that the company has now convened a sukukholders’ meeting on May 9, 2023, in regard to the SCA. Capex and associated financing plans have not been finalised. The SCA will entail lane widening and flood mitigation works with construction costs estimated at RM2.3 billion. In consideration, ANIH’s concession period has been extended to 2069.
MARC Ratings highlights that under the SCA a new toll structure will be implemented in 2027 subject to completion of works related to the lane widening and flood mitigation; in the interim, no toll compensation from 2022 onwards would be provided. Under this circumstance, the rating agency has forecast that the finance service coverage ratio in 2023 would decrease to around 1.8x from 1.9x but remain above the covenanted 1.75x, and accordingly there would be no immediate impact on the rating. In the near term, MARC Ratings expects ANIH to put in place a new financing structure that would also address the current outstanding RM1.48 billion sukuk. The rating agency will continue to monitor developments in ANIH and provide updates as appropriate.