KUALA LUMPUR: Fixed-line telecommunications provider Time dotCom Bhd plans to raise up to RM1 billion by issuing a sukuk programme to fund the expansion of its fibre footprint, further development of its data operations, refinancing of credit facilities and for working capital.

In a statement yesterday, RAM Rating Services Bhd said it had assigned a preliminary rating of AA3/Stable to Time’s proposed RM1 billion Islamic medium-term notes programme (2015/2035). “The rating reflects Time’s sound business position in the fixed-line space and the earnings diversity from its international bandwidth business as well as data centre.

“Nonetheless, the rating is constrained by Time’s small market share compared with its larger rival’s which commands the lion’s share of the wholesale and enterprise fixed-line market,” the rating agency said. Its gearing ratio is expected to come in at an average of 0.3 times over the next three years.

RAM co-head of infrastructure and utilities ratings Davinder Kaur Gill noted that the fixed-line division will remain the linchpin of Time group’s earnings, supported by the strong performance of the enterprise and wholesale segments. “Prospects for its international bandwidth business remain bright pending the completion of the construction of three new international submarine cables — Faster, Asia-Africa-Europe and Asia-Pacific Gateway,” she added.

This article first appeared in digitaledge Daily, on August 19, 2015.