Published on 09 April 2015
RAM Ratings is of the view that Cahya Mata
Sarawak Berhad’s (CMS or the Group) recently announced offer to acquire
50% of Sacofa Sdn Bhd (Sacofa or the Company) will not materially impact
the Group, which is rated AA3/Stable/P1 by RAM. The proposed
acquisition, which will cost CMS about RM187 million, can be funded
entirely by internally generated funds; the Group had a large cash hoard
of RM830 million as at end-2014. As such, the Group’s gearing level is
expected to remain strong at below 0.1 times and its funds from
operations debt coverage at above 1.5 times subsequent to the
acquisition.
Notwithstanding its neutral rating impact, the
acquisition of Sacofa will, if approved, contribute positively to CMS’s
overall performance, providing the latter with stable recurring income.
Sacofa is currently the sole provider of telecommunication towers to
local telecommunication players such as Celcom, DiGi and Maxis in
Sarawak. For the past 3 years, Sacofa has generated an average revenue
and pre-tax profit of RM150 million and RM74 million respectively,
mainly through the leasing of its telecommunication towers.
CMS started off as a cement manufacturer in Sarawak,
and has since expanded into various other businesses including trading
in construction materials, construction and road maintenance, property
development, education as well as financial services. The Group is
currently a major private-sector player in Sarawak and the sole cement
and clinker manufacturer in the State.
Sacofa was incorporated in Malaysia on 11 July 2001
by the government of Sarawak as the State’s quasi-telecommunications
infrastructure arm to facilitate the development and expansion of the
State’s telecommunication network infrastructure. The Company holds a
20-year concession to construct, own and manage telecommunication towers
and infrastructure in Sarawak.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.