[RAM] RAM Ratings affirms UniTapah's AAA/Stable issue rating

RAM Ratings has affirmed the AAA/Stable rating of UniTapah Sdn Bhd’s (Unitapah or the Company) Sukuk Murabahah of up to RM600 mil (2014/2035) (the Sukuk).

The rating is anchored on the Company’s steady cashflow and robust debt coverage metrics. Under a 23-year concession which expires in January 2034, Unitapah receives predictable and prompt monthly payments from Universiti Teknologi MARA (UiTM) for developing and maintaining its campus in Tapah, Perak.

UniTapah’s maintenance performance was excellent in 2024, with no penalties incurred. Maintenance is undertaken externally through Everfine FMS Sdn Bhd, a subsidiary of facility management service provider GFM Services Berhad.

In line with the strong operational performance, the Company’s finance service coverage ratio (FSCR, with cash balances) was 2.16 times in December 2024, exceeding RAM’s stressed projections. Our stressed assumptions indicate that FSCRs will remain strong at above 1.80 times throughout the sukuk tenure, comfortably surpassing levels required for the sukuk rating.

Sukukholders’ interests are safeguarded by the transaction’s restrictive financing terms and covenants imposed, including limitations on additional debt and a complete prohibition of distributions. As a result, the transaction benefits from all cash surpluses generated, with any cashflow outperformance relative to our stressed analysis leading to an improved debt coverage profile. Counterparty risk is deemed low as the Government of Malaysia, via UiTM, is the ultimate obligor of concession payments.

As with other concession-based transactions, UniTapah is exposed to concession termination risk. While the compensation mechanism is spelt out, risk arises from potential delays in the receipt of reimbursements. Termination is viewed as remote, considering the Company’s track record and the non-complex nature of the maintenance work. 


Analytical contacts
Neo Xue Wei, CFA
(603) 2708 8241
xuewei@ram.com.my

Davinder Kaur Gill
(603) 2708 8220
davinder@ram.com.my

Media contact
Sakinah Arifin 
(603) 2708 8212
sakinah@ram.com.my