MARC has placed its BBB+IS sukuk rating on Alam Maritim Resources Berhad’s (Alam Maritim) RM500 million Sukuk Ijarah Medium-Term Note Programme on MARCWatch Negative.

Posted Date: May 30, 2017

MARC has placed its BBB+IS sukuk rating on Alam Maritim Resources Berhad’s (Alam Maritim) RM500 million Sukuk Ijarah Medium-Term Note Programme on MARCWatch Negative. The current outstanding amount under the rated programme is RM75 million, of which RM30 million is due in July 2017.

The rating action highlights increased risk of missed payments or a distressed exchange on Alam Maritim’s sukuk upon the company entering into Corporate Debt Restructuring Committee (CDRC) mediated negotiations with its lenders and sukukholders. Alam Maritim announced to Bursa Malaysia on May 26, 2017 that it had received approval from CDRC on its application for the latter’s assistance to mediate the aforementioned debt restructure. The CDRC, which is under the purview of Bank Negara Malaysia, has issued a standstill letter to creditors, including the sukuk trustee, while Alam Maritim is required to submit a proposed debt restructuring scheme within 60 days from the approval letter.

Alam Maritim’s sinking fund stood at RM25.3 milion as at April 10, 2017 in relation to its forthcoming scheduled payment of RM30 million in July 2017. The rating agency had been maintaining a negative outlook on the rating since March 2016 in view of Alam Maritim’s declining liquidity buffer, compounded by slow replenishment of its order book. While the order book has shown some improvement in recent months, weak cash flow generation has continued to weigh on its financial performance. MARC will resolve the MARCWatch Negative placement pending further clarity on Alam Maritim’s debt restructuring programme.

Contacts:

Afeeq Amiri, +603-2082 2256/ afeeqamiri@marc.com.my,

Sharidan Salleh, +603-2082 2254/ sharidan@marc.com.my.