MARC Ratings has maintained the MARCWatch Negative placement of ANIH Berhad’s Senior Sukuk Musharakah programme rating which has a current outstanding of RM1.48 billion. The rating has been placed on MARCWatch since May 25, 2023 to reflect the uncertainties that arose from the new supplemental concession agreement (SCA) between ANIH and the government signed on November 17, 2022, including the potential for an event of default being called upon by sukukholders for not obtaining prior consent to signing the SCA. ANIH is a toll concessionaire for the 60-km Kuala Lumpur-Karak Highway and the 174.5-km East Coast Expressway Phase 1. The new SCA will extend the current concession period from 2032 to 2069 and will entail lane widening and flood mitigation works with construction costs estimated at RM2.3 billion.

The rating agency notes the positive progress ANIH has made to date in resolving the aforementioned issues. This includes the emergence of Tan Sri Dr Azmil Khalili Dato’ Khalid as a single shareholder pending government approval. With the shareholder agreement in place and upon obtaining necessary approval, ANIH is expected to move forward with its financing plans that would include securing a bank loan to redeem its outstanding sukuk under the rated programme and to fund the initial construction cost for the extension works on the highways.

ANIH’s upcoming debt maturity under the programme is the RM180 million sukuk due on November 29, 2023, for which there is sufficient liquidity as reflected by its cash and cash equivalents of RM304.4 million as at end-July 2023. The rating agency will continue to closely monitor the progress of the financing plans which are expected to be concluded by year end.