. Nestle Foods is a wholly-owned subsidiary of Nestle Malaysia, RAM said.
It said that as the manufacturing arm of Nestle Malaysia, Nestle Foods is an integral part of the group and hence, the ratings are based on the credit risk profile of Nestle Malaysia as a group.
In addition to its sturdy business profile, the group’s cash-generating ability of more than RM200mil per annum is also expected to remain resilient against economic cycles and the volatility in raw material prices.
Nevertheless, it may need to refinance a portion of the MCP/MMTN when it matures in 2010, due to its practice of paying out generous dividends.
As at June 30, the group’s consolidated borrowings stood at RM590mil, including outstanding MMTNs of RM250mil. – Bernama
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Prolintas is the concessionaire for the 7.4km elevated highway from Ampang town and Ulu Klang to Jalan Sultan Ismail in the centre of Kuala Lumpur. The highway commenced tolling operations in June 2001.
In a statement yesterday, RAM said the upgrade was premised on the significant improvement in the company's liquidity profile and therefore, greater cash flow protection for the lenders.
“Previously, our major concern for Prolintas was its potential default in servicing the interest on the Government Support Loan 1 (GSL 1) in 2004.”
The terms of the GSL 1 have been restructured, encompassing a substantial reduction in the interest rate and lengthening of the repayment period to eight years beginning 2009, compared with the original three-year repayment period starting in the same year, the rating agency said.
In addition, RAM added, the 8% interest charged on the RM70mil shareholders' loan would be waived and the loan would be converted to preference shares, the redemption of which would be at the option of Prolintas.
For 2004/07, Prolintas is expected to achieve debt service cover ratio ranging from 1.19 times to 4.14 times. – Bernama
“The bank's strong niche position in the motor vehicle hire purchase market, satisfactory asset quality, and adequate capitalisation underpin the ratings on the bank,” said Standard & Poor's credit analyst Adrian Chee, associate director in the Financial Services Ratings Group.
“These strengths are, however, counterbalanced by its average profitability, which is curtailed by its relatively small size, concentration in the loan portfolio, and less developed sources of non-interest income,” he said.
The bank's asset quality, as measured by its ratio of gross non-performing assets (NPA) to total assets, is above average by domestic standards. As at June 30, the bank's gross NPA ratio, on a six-month overdue basis, stood at 6%.
The bank's loan loss reserves also provide ample coverage for its non-performing assets, standing at about 92% and 90% in June 2004 and December 2003, respectively. – Bernama
Nestle Foods is a wholly-owned subsidiary of Nestle Malaysia, RAM said.
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