RAM Ratings reaffirms Mukah Power's AA 1 (S) sukuk rating

KUALA LUMPUR: RAM Rating Services Bhd has reaffirmed the enhanced AA 1 (s)/Stable rating of power producer Mukah Power Generation Sdn Bhd’s RM665 million Senior Sukuk Mudharabah Programme (2006/2021).

In a statement, the ratings agency said the rating reflects Sarawak Energy Bhd Group’s strong support for Mukah Power, which it owns via its 100 per cent-held subsidiary, SEB Power Sdn Bhd.

RAM Ratings said Sarawak Energy’s support for Mukah Power has been clearly observable through the years.

For instance, it said Mukah Power inked a new power purchase agreement (PPA) with Sarawak Energy’s wholly-owned subsidiary Syarikat SESCO Bhd (SESCO), which took effect on Jan 1, 2018 and had since boosted its financial performance.

"Mukah Power’s rating is also linked to that of Sarawak Energy by a Letter of Support (LoS) from SESCO dated Aug 21, 2013. Pursuant to the LoS, SESCO undertakes to ensure that Mukah Power meets its financial obligations under the Senior Sukuk throughout the tenure of the facility.

"Based on these factors, we expect Sarawak Energy to step in to meet any potential cash shortfall that Mukah Power may encounter,” it added. - Bernama

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