MARC has lowered its rating on ABI Malaysia Sdn Bhd’s (ABIM) RM80 million Al-Bai Bithaman Ajil Islamic Debt Securities (BaIDS) to A- ID from A ID and concurrently places the BaIDS facility on MARC Watch with a Negative Outlook. The rating actions reflect the negative impact arising from its holding company, Polymate Holdings Berhad being placed under Practice Note 1/2001 of Bursa Securities of Listing Requirements. Polymate Holdings Berhad had announced that an event of default in payments by its subsidiaries had occurred resulting from inability to service loan repayments to the lending banks due to their very tight overall working capital positions. The company cited that the cash flow problems are mainly attributed to accumulated losses incurred over the past few years; sharp increases of raw material prices and withdrawals of some banking facilities by two of the lending banks. Polymate Holdings Berhad is currently in discussion with all the lending banks to negotiate on a restructuring scheme for the various banking facilities of its subsidiary companies in order to regularise the group’s financial position.

MARC will continue to monitor future developments and assess the impact on the rating, going forward.