MARC downgrades Alam Maritim sukuk rating on missed payment

PETALING JAYA: Malaysian Rating Corp Bhd (MARC) has downgraded loss making Alam Maritim Resources Bhd's sukuk rating to D from BB+ following the missed sukuk principal payment of RM30 million on July 6.

The RM30 million payment is part of the outstanding RM75 million under its Sukuk Ijarah Medium-Term Notes programme.

"Concurrently, the rating has been removed from MARCWatch Negative where it was placed on May 30, 2017. Alam Maritim is a major domestic offshore support vessel provider for the oil and gas industry," MARC said in a statement.

The group incurred a narrowed net loss of RM11.89 million for the first quarter ended March 31, 2017 against RM19.19 million in the previous corresponding period.

Separately, Alam Maritim said in a filing with Bursa Malaysia that the group and its subsidiaries, joint venture companies and associated companies are in active discussions and negotiations with their respective financiers and sukukholders to restructure the repayment terms and conditions of the existing loans/financing facilities and sukuk programme.

It said the affected companies will continue to be in close communications with their respective financiers and sukukholders to achieve a workable restructuring scheme while preserving liquidity.

Alam Maritim is required to submit a proposed debt restructuring scheme within 60 days from the date of the approval letter dated May 25, 2017 issued by the corporate debt restructuring committee (CDRC) of Bank Negara Malaysia.

It continues to remain under the informal standstill arrangement with the respective financiers/sukukholders. The standstill letter was issued by CDRC to the financiers and trustee to the sukukholders on May 25, 2017.

Meanwhile, the Kuala Lumpur High Court has granted an order in favour of KTL Offshore Pte Ltd for the winding up of Alam Swiber Offshore (M) Sdn Bhd, a joint controlled entity between Alam Maritim (M) Sdn Bhd and Swiber Offshore Construction Pte Ltd.

Alam Maritim told Bursa Malaysia that this is due to default of outstanding payment of S$219,452.60 (RM682,000) owing to KTL for goods sold and delivered and/or services rendered.

Swiber Offshore Construction is a subsidiary of Swiber Holdings Limited. Both have been placed under judicial management by the Singapore High Court.

Under the court order, a Malaysian official receiver will be appointed as liquidator and the costs of and incidental to the petition will be paid out of the assets of Alam Swiber Offshore.

Alam Maritim said the alleged debt has been incorporated in the financial statements and the financial impact from the winding-up proceedings is the loss of investment in Alam Swiber Offshore.

It added that there is no impact on the operation of the group and it is seeking legal advice to resolve the matter.