KUALA LUMPUR: IOI Corp Bhd needs to work out a concrete refinancing plan by September this year for its US$600mil (RM2.49bil) bond, representing around half its reported debt, which has one year left to maturity, according to Moody’s Investors Service.

       In a statement, it noted that IOI Corp’s (Baa2 stable) credit quality will weaken if it is unable to clearly articulate a concrete refinancing plan by September that would eliminate near-term refinancing risk associated with this large debt maturity.

       “IOI’s refinancing strategy is contingent on its investment plans, which are yet to be finalised. The company’s large cash balance, including short-term funds and deposits, comprised RM2bil as of March 31, 2021, with around RM900mil relating to funds earmarked for investments from past asset sales proceeds, ” it said.

       Moody’s said the time for the company to use funds earmarked for investments lapses in September 2021.

       Therefore, by September, IOI expects to determine the quantum of funds to be raised to refinance its maturing bond, along with any additional funds to be raised if a potential acquisition exceeding RM900mil is identified.

       The company’s stable business profile, large cash balance and support from relationship banks should aid refinancing efforts, it added.

       Moody’s also expects IOI to maintain stable operations.

       “IOI Corp has an established position as an efficient palm oil producer with integrated operations across the palm oil value chain, a track record of managing profitability through multiple commodity price cycles, and the ability to benefit from the favorable long-term demand for palm oil, ” it said,