[RAM] RAM Ratings affirms Solarpack Suria Sungai Petani's AA2/Stable SRI sukuk

RAM Ratings has affirmed the AA₂/Stable rating on Solarpack Suria Sungai Petani Sdn Bhd’s (3SP or the Company) ASEAN Green SRI Sukuk Wakalah of up to RM305 mil (2023/2043). The affirmation reflects the Company’s projected strong cash flow coverage, underpinned by the sound operational performance of its solar photovoltaic plant in Sungai Petani, Kedah (the Plant).

In 2024, higher solar irradiance raised the net electrical output to 175.8 GWh from the 90.88 MWac plant (2023: 174.8 GWh), exceeding both the power purchase agreement requirements and RAM’s projections. This was despite minor outages and an inverter issue that has since been resolved. With near-full availability maintained into 2025, 3SP’s financial performance is expected to remain broadly stable this year.

The Company achieved revenue and pre-tax profit for 8M FY Dec 2025 of RM27.77 mil and RM3.20 mil, respectively (FY Dec 2024: RM40.68 mil and RM1.95 mil). Earnings in fiscal 2024 were mainly impacted by a remeasurement of the decommissioning provision (+RM2.18 mil), though pre-financing cash flow remained healthy. 3SP’s finance service coverage ratio (FSCR, including cash balances) of 2.17 times on the most recent sukuk repayment date of 6 October 2025 surpassed our expectations of 1.92 times. As at 24 October 2025, cash and cash equivalents were adequate at RM28.46 mil. 

Looking ahead, 3SP is anticipated to maintain strong minimum and average annual FSCRs (with cash balances) of 1.65 times and 1.84 times, respectively, over the remaining tenure of the sukuk. This is supported by satisfactory energy output and stringent transaction covenants that ensure disciplined cost management and distributions. The Company’s liquidity position stayed sound after a RM15.65 mil dividend distribution in FY Dec 2024; however prudent cash retention is necessary to preserve sufficient buffers for future sukuk obligations, given the projected decline in cash flow from plant degradation over time.

The Company’s reliance on a single project exposes it to project-specific and force majeure risks though these are somewhat mitigated by the Plant’s modular structure and vast 204.2-acre site. As with other solar plants, exposure to solar irradiance variability remains a key risk factor.

OCK Group Berhad’s proposed investment in Solarpack Asia Sdn Bhd (one of 3SP’s shareholders and the appointed operations and maintenance service provider) via redeemable preference shares is expected to conclude upon the satisfaction of all conditions. While no changes are anticipated in Solarpack Asia’s shareholding and the Plant’s operational arrangements at this juncture, 3SP’s credit risk profile will be reassessed should there be any changes in ownership or management.  


Analytical contacts
Liew Kar Ling
(603) 2708 8216
karling@ram.com.my

Chong Van Nee, CFA
(603) 2708 8210
vannee@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my