[RAM] RAM Ratings affirms Konsortium ProHAWK's AA2/Stable IMTN rating

RAM Ratings has affirmed the AA₂/Stable rating of Konsortium ProHAWK Sdn Bhd’s (ProHAWK) RM900 mil Islamic MTN Programme (2013/2033). The affirmation reflects the ongoing and demonstrated support of its parent, UEM Group Berhad (UEM; rated AA₁/Stable by RAM), which remains committed to ensure ProHAWK’s performance is at a level commensurate with its rating. The affirmation action is also supported by stable concession payments from the Ministry of Health (MoH). ProHAWK holds the concession to design, construct, commission and maintain Hospital Tunku Azizah in Kuala Lumpur.

Payment receipts from the MoH have improved since the last review. Despite the stability of these payments, ProHAWK’s projected net cashflows however, have weakened relative to prior year’s expectations. Net operating cash flows are now substantially lower primarily due to higher operating and maintenance expenses, including higher asset management services (AMS) and IT costs contributed by higher minimum wages and expanded scope of sales and service tax. Under RAM’s sensitised projections, ProHAWK will need to extend the Standby Letter of Credit (SBLC) through to 2032 to meet the Finance Service Reserve Account requirements and to maintain the minimum finance service coverage ratio of 1.50 times necessary for its current rating.

To address this potential shortfall, UEM is in the process of extending its Letter of Undertaking to provide liquidity support of up to RM60 mil via SBLCs to PROHAWK until the end of sukuk maturity in 2033. This extension, expected to be finalised soon, reinforces UEM’s commitment of support, which includes cumulative capital injections totalling RM187.9 mil, in addition to its initial investment. 

Operationally, ProHAWK’s asset management services contract with UEM Edgenta ended on 30 November 2024. Since then, ProHAWK has in-sourced facilities engineering management, while retaining existing subcontractors for key services. Service delivery has continued smoothly after some initial teething issues. AMS performance has since improved, with deductions trending down towards management’s target of 5% by year end. 


Analytical contacts
Darrel Tiang
(603) 2708 8219
darrel@ram.com.my

Thong Mun Wai
(603) 2708 8255
munwai@ram.com.my

Media contact
Sakinah Arifin
(603) 2108 8212
sakinah@ram.com.my