The local industry’s ‘Monday Blues’ story today tells of Serba Dinamik being given ‘CC’ status from ‘CCC’ by S&P Global Ratings on the issue of late payment of sukuk coupons which will give a negative view of the company.
A statement on Friday, November 12, issued by S&P, the US credit rating agency, said Serba Dinamik had also downgraded the long -term issue rating of the company's secured sukuk to ‘CC’ from ‘CCC’.
The agency added that the negative view of the engineering company was a result of the growing threat from the company's short -term easy cash problems which worried the deck as financing problems as well as a maturity time rate of less than 6 months continued to create concern.
The downgrade will see the company at risk of default due to their failure to pay US $ 7 million worth of sukuk coupons from the US $ 222 million due in May 2022.
The terms of the Sukuk agreement indicate that Serba Dinamik has 30 days after the deadline, 9 November 2021, to pay the coupon before it is subject to ‘default’ status.
According to S&P, they doubt Serba Dinamik's ability to meet the payment obligations even though the company is taking the necessary steps to resolve the payment problem.
Apart from that, Serba Dinamik also has a syndicated loan repayment payment of RM99 million to be paid in December 2021 and has a large maturity by 2022 including RM100 million of commercial paper as well as the remaining US $ 222 million.
Meanwhile, the unaudited final balance of Serba Dinamik was reported to be worth RM497 million recorded as at 30 June 2021.
