12 Jul 2013 11:19

KUALA LUMPUR, July 9 (Bernama) -- RAM Ratings has reaffirmed the respective AAA(bg) and AAA(fg) ratings of Tranche 1 and Tranche 2 of NUR Power Sdn Bhd's RM650 million Guaranteed Sukuk Mudharabah (2012/2027), with a stable outlook.

The enhanced ratings reflected an irrevocable and unconditional bank guarantee from Maybank Islamic Bhd and a financial guarantee from Danajamin Nasional Bhd, which enhanced the credit profile of the sukuk beyond NUR Power’s stand-alone credit strength, it said in a statement.

NUR Power is an investment-holding company with subsidiaries involved in the generation, distribution and sale of electricity to tenants of Kulim Hi-Tech Park (KHTP) in Kulim, Kedah, under a 30-year licence which expires on Sept 16, 2028.

RAM said Nur's standalone credit strength was reflective of the group’s exposure to sector-concentration risk as its performance was highly dependent on the performance of its big-load industrial customers that are engaged in high-technology industries.

NUR Power’s top five customers, which contributed 79 per cent of its electricity sales in fiscal 2012, comes from the cyclical electric and electronic and solar-panel manufacturing industries.

The group also faces customer-concentration risk, with 30 per cent of its electricity sales emanating from its single largest customer, First Solar Malaysia Sdn Bhd.

"Although electricity take-up by First Solar dropped 22.87 per cent, year-on-year, in 2012, the group’s overall power sales fell marginally supported by increased power take-up by existing customers and a new customer.

"As NUR Power lacks the flexibility to adjust its tariff in line with increases in its cost structure, it is susceptible to margin compression in the event that it is required to purchase power from Tenaga Nasional Bhd at an elevated cost to meet demand at KHTP," the rating agency said.