[RAM] RAM Ratings affirms BGSM Management's sukuk at AA3/Stable

RAM Ratings has affirmed the AA₃/Stable rating of BGSM Management Sdn Bhd’s (the Group) RM10 bil Islamic Medium-Term Notes Programme (2013/2043). The affirmation reflects the strong business and financial position of its indirect subsidiary, Maxis Berhad (Maxis or the Company), a leading Malaysian telecommunications provider.

The issue rating continues to be anchored by Maxis’ established market position and financial strength. Having no operating business of its own, BGSM Management relies solely on dividend distributions from Maxis to meet its annual debt servicing needs. These obligations are structurally subordinated to Maxis’ debts, a factor incorporated into our rating assessment.

As of September 2025, Maxis expanded its mobile subscriber base by 632,000 (+4.9% y-o-y) to 13.5 mil, holding a 27% market share. Its ongoing migration from prepaid-to-postpaid subscribers continued to drive growth in the postpaid segment, while the Company’s bundling and converged strategy added an additional 6,000 home connectivity subscribers (+0.8% y-o-y). Service revenue remained largely flat (9M 2025: RM6.6 bil), with operating profit before interest & tax rising 3.2% to RM3.0 bil supported by prudent cost rationalisation, and improved procurement terms for devices.

BGSM Management returned to profitability in FY Dec 2024 primarily due to lower goodwill impairment on its investment in Maxis. Its capital structure stayed adequate, with a gearing ratio of 0.55 times as at end-December 2024 (end-December 2023: 0.57 times) while funds from operations debt coverage (FFODC) was steady at 0.32 times in fiscal 2024 (fiscal 2023: 0.31 times).

Looking ahead, Maxis is expected to strengthen its earnings through core segments and AI investments, with capital expenditure (capex) funded from internal cash flows. Under RAM’s stressed scenario of relatively flat revenue growth over the near- to mid- term as well as some incremental capex and investments in Digital Nasional Berhad (DNB), the Group’s lease-adjusted FFODC is projected to average around 0.24 times over the next three years, a level still commensurate with the current rating.

On the regulatory front, the proposed mandatory MyDigital ID and imposed limits for prepaid subscriber registrations are viewed as necessary to enhance privacy and security measures as the digital economy evolves. Additionally, Maxis increased its spectrum holdings by acquiring a 2X10MHz block in the 2100MHz band via a spectrum assignment of 12 years for RM400 mil.

DNB – the entity tasked with rolling out Malaysia’s first 5G network – is 19.44%-owned by Maxis; this stake will increase to about 33.33% upon completion of the put option exercised by the Ministry of Finance on 1 December 2025 to fully divest its stake to DNB’s remaining shareholders, including Maxis. The latest acquisition outlay of RM328 mil will leave the Group’s financial metrics within the rating thresholds. However, further capital calls and funding support may be needed to refinance and/or repay DNB’s liabilities as well as cover future operating deficits. Given the evolving nature of DNB’s capital requirements, we will re-evaluate financial implications for the Group upon greater clarity.


Analytical contacts
Tan Yan Choong
(603) 2708 8256
yanchoong@ram.com.my

Davinder Kaur Gill 
(603) 2708 8220
davinder@ram.com.my 

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