'The worst is over for MRCB', post EDL disposal

Malaysian Resources Corp Bhd announced last Monday that its wholly owned subsidiary MRCB Lingkaran Selatan Sdn Bhd entered into a termination and settlement agreement with the government on the Eastern Dispersal Link (EDL) concession. 

The Edge reports that this will erase RM1 billion of debt from the its books, and relieve it of RM80 mill in interest costs per year.

MRCB's gearing will be lowered, post disposal, to 0.28 times, from 0.53 times as at Dec 31, 2017, said the company in a filing to Bursa Malaysia. 

Following the RM1.32 billion that the government will pay under the termination and settlement agreement, MRCB will have RM23.1 million for general working expenses, after repayment of borrowings.

Analysts agree that pressure on MRCB has eased. 

"The worst is over for MRCB. The reduction in gearing helps a lot, and it has a breathing space for the projects it plans to carry out," observes AmInvestment Research analyst Thong Pak Leng, quoted by the publication. 

After the planned sale of an 80% stake in the Bukit Jalil Sentral project to the Employees Provident Fund for RM1.14 billion, MRCB's gearing will be lowered even further. 

Other assets pegged for sale are the 21-storey serviced apartment development AScott Sentral in Kuala Lumpur and Menara Celcom in Petaling Jaya.