KUALA LUMPUR (Sept 19): MARC Ratings has affirmed its rating on Segi Astana Sdn Bhd’s RM415 million Asean Green Medium-Term Notes (MTN) facility at A+ and revised the rating outlook to stable, from negative.
Segi Astana, a unit of WCT Holdings Bhd, is the concessionaire for the integrated complex, [email protected], at Kuala Lumpur International Airport 2 (klia2).
MARC said the outlook revision to stable was based on improvement in Segi Astana’s cashflow generation from a sharp uptick in mall rental receipts and carpark fees collection, following the easing of travel restrictions in the third quarter of 2021 (3Q2021) and the reopening of international borders in 2Q2022.
Segi Astana’s current outstanding amount under the rated facility stands at RM310 million, the rating agency said in a report.
It said Segi Astana’s stronger liquidity position, which has been aided by proceeds from the issuance of redeemable preference shares (RPS) to its 70%-shareholder WCT Land Sdn Bhd, a wholly-owned subsidiary of WCT Holdings, has strengthened its ability to meet its financial obligations.
“The rating affirmation considers the improved prospects for [email protected] in terms of occupancy of its retail mall and carpark operations, on the back of increasing passenger footfall through klia2.
“By end-July 2022, klia2 handled 5.3 million passengers compared with 0.5 million a year ago, while aircraft movements rose to 96,200 from 32,600 over the same period,” MARC said.
It added that against the backdrop of positive recovery of passenger footfall, the occupancy level of the mall, which has a net lettable area of 379,800 sq ft, is expected to improve to 70% by end-2022, from the current 65.5%.
“The affirmation is also underpinned by Segi Astana’s lengthy concession of 36 years that began on Aug 1, 2011.
“The long concession period provides headroom for refinancing of the last tranche before the expiry of the programme in January 2028. Nonetheless, in the event the refinancing does not take place, a liquidity support undertaking from WCT (AA-/Stable) will address the final repayment,” the rating agency said.
This undertaking has translated into a single notch uplift on Segi Astana’s rating.
MARC said the shareholders’ support through the issuance of RPS amounting to RM76 million between 2021 and 2022 to WCT Land, and the deferment of arbitration settlement payment and fixed monthly charges (from October 2020 to August 2022) totalling RM37 million to Malaysia Airports Holdings Bhd (MAHB), has supported Segi Astana’s credit profile.
MAHB holds the remaining 30% interest in Segi Astana.
The rating agency also noted that Segi Astana’s monthly operating cashflows have been positive in 2022, with rental income of RM29.6 million during the first seven months of the year.
In addition, collection from carpark operations improved to RM2.5 million per month from RM480,000 per month in 2021, said MARC, noting that fees from the carpark (which has 5,690 parking bays) accounted for about half of the mall’s revenue, pre-pandemic.
It added that as at end-July 2022, Segi Astana had RM46 million in its designated accounts to meet its upcoming repayment of RM30 million in January 2023.