KUALA LUMPUR: MARC Ratings Bhd has revised its outlook on Tropicana Corp Bhd
’s rated programmes to stable from negative.
In a statement, the rating agency said the ratings on the programmes, the RM1.5bil Islamic medium-term notes (IMTN) (Sukuk Wakalah) and RM2.0bil perpetual Sukuk, have been affirmed at AIS and A-IS.
“The outlook revision considers the improved credit profile of Tropicana, driven by its ongoing deleveraging exercises that have resulted in its leverage — debt-to-equity (DE) ratio — to strengthen to around 0.70 times as at end-February 2024 from 0.87 times as at end-2022,” MARC said.
As part of the exercises, the group had disposed of key investment properties and land parcels worth RM761.5mil, leading to total borrowings declining to about RM3.5bil from RM4.4bil.
MARC Ratings understands further disposals of investment properties and land parcels are in advanced stages of negotiations and would reduce borrowings to RM2.4bil, with DE projected to decline to around 0.50 times by end-2024.
Tropicana's ratings are affirmed due to its long history in property development, large unbilled sales, and expected financial improvement with lower interest costs from reduced borrowings.
“Unbilled sales of RM2.5bil underline its earnings visibility over the next two years. Over the near term, MARC Ratings expects the group to return to profitability from pre-tax loss of RM100.0mil in 2023,” it said.
MARC said the outstanding under the sukuk Wakalah and Perpetual sukuk programmes declined to RM855.5mil and RM648.0mil as of end-April 2024 (end-March 2023: RM1.5bil and RM648.0mil).
