The reaffirmed rating reflects UEM’s strong credit profile as the ultimate obligor, supported by its purchase undertaking to the sukuk trustee on behalf of sukuk holders. It also takes into account the high likelihood of extraordinary support from UEM’s parent company, Khazanah Nasional Berhad, in line with RAM’s methodology for assessing government-linked entities.
According to RAM, UEM remains an integral part of Khazanah’s role as Malaysia’s infrastructure investment arm, with strategic holdings across highways, airports, property, and green energy. Among its key subsidiaries is UEM Lestra Berhad, which leads Khazanah’s green business initiatives under the National Energy Transition Roadmap (NETR).
UEM also owns stakes in PLUS Malaysia Berhad and Malaysia Airports Holdings Berhad (MAHB), the latter of which was transferred to UEM in 2024 as part of Khazanah’s efforts to consolidate infrastructure assets. In 2025, Khazanah further strengthened UEM’s position by injecting funds to complete MAHB’s privatisation and later capitalising RM2.2 billion in outstanding balances into Redeemable Convertible Preference Shares (RCPS).
In its assessment, RAM has proportionately consolidated MAHB’s debts and cash flows to reflect UEM’s joint control of the airport operator, while treating the RCPS as an equity-like instrument when adjusting financial metrics. The agency noted that UEM’s standalone credit profile remains supported by its diversified business portfolio and strong market positions across property, cement, asset management, and airport operations.
Although dividend income from PLUS will remain restricted until 2038 due to the toll restructuring, RAM expects future cash flows from UEM’s cement, property, and MAHB divisions to support its financial profile. The Group also plans to raise between RM1.1 billion and RM1.5 billion in new borrowings through 2026 to expand UEM Lestra’s green investment platform. However, RAM cautioned that these expansion plans come with execution risks and uncertainties related to investment returns.
UEM’s cash flow debt coverage remains below 0.15 times at both company and group levels. Nonetheless, company-level gearing is expected to remain strong at around 0.3 times, while group-level adjusted gearing is projected to moderate to 0.55 times after the RCPS conversion, down from 0.70 times as of June 2025.
RAM concluded that UEM’s healthy balance sheet, diversified access to banking facilities, and strong capital markets track record continue to provide the Group with financial flexibility and reinforce its overall credit strength.