Posted Date: March 26, 2021
MARC has downgraded MEX II Sdn Bhd’s (MEX II) RM1.3 billion Sukuk Murabahah Programme and RM150.0 million Junior Bonds ratings to CIS/C, from BBIS and B.
The rating action is driven by the liquidity pressure MEX II is facing and the likelihood of missing an upcoming payment on its sukuk. MEX II has a sukuk repayment of RM68.7 million due on April 29, 2021 against which it has a cash balance of RM7.7 million as at end-February 2021. It also has another RM38.2 million due in October 2021.
MEX II has indicated that it is in discussions with financial institutions to obtain a bridge facility to meet repayment obligations, and with investors for a postponement of the April maturity to October 2021. While MEX II’s viability may rest on a successful restructuring of the sukuk, through which additional funding will be sought to complete the stalled 16.8-km Lebuhraya Putrajaya-KLIA highway project, the timing remains uncertain.
The rating remains on MARCWatch Negative. If no payment is made on the upcoming financial obligation in April 2021, the ratings will be downgraded to D. In the event MEX II obtains an indulgence from sukukholders to defer the sukuk payment, the ratings will remain at CIS/C.