KUALA LUMPUR, May 11 — Tenaga Nasional Bhd’s (TNB) A3 senior unsecured rating is not immediately affected by its announced acquisition of 30 per cent of GMR Energy Ltd (GEL) for a consideration of approximately US$300 million (RM1.2 billion), Moody’s Investors Service said.
“The outlook on the rating remains stable,” Moody’s Vice-President and Senior Analyst Abhishek Tyagi said in a statement today.
He said however, the proposed transaction is credit negative as it would reduce TNB’s liquidity and increase its adjusted debt, depending on the funding mix.
“Furthermore, the proposed transaction exposes TNB to new business risks and regulatory environments, and is indicative of the company’s growth aspirations to expand its presence in overseas emerging economies beyond Malaysia,” he said.
Moody’s said the acquisition would have manageable impact on TNB’s financial profile.
“Over the next 12 to 18 months, we expect TNB’s retained cash flow to debt ratio to be in the range of 17 to 25 per cent, which is within the rating expectation,” it said.
TNB has entered into a conditional subscription agreement to acquire 30 per cent of new equity shares under GEL, which is majority owned by GMR Infrastructure Ltd, an infrastructure developer in India. — Bernama
