Thursday, Oct 20, 2005
MARC places Europlus Sdn Bhd (Europlus) on MARCWatch with negative outlook premised upon its current weak cash flow position resulting from the delays in development projects and its reliance on the disposal of 25% equity interest in Kumpulan Europlus Berhad (KEB) shares to IJM Corporation, with which the related Share Purchase Agreement has been extended to 30 November 2005.
Europlus has not been making the required monthly instalments to the Sinking Fund Account. According to the Facility Agent, there is only around RM6.0 million in this account, instead of the required RM81.4 million by 31 August 2005. The current outstanding amount is RM196.0 million. The Noteholders of the MUNIF had agreed to withhold the declaration of Cancellation Event for six months from August 2005, pending completion of a re-financing plan.
In addition, the current proposed disposal of 25% equity interest to IJM, which is viewed as a key solution to their cashflow difficulties, is contingent upon the fulfilment of certain conditions precedent including the signing of West Coast Highway Concession Agreement. Upon completion, IJM would be able to help resuscitate many of the development projects. However, the proposal is now extended to 30 November 2005 delaying any form of immediate relief to Europlus’s debt servicing pressures.
MARC will continue to monitor developments and assess their impact on the rating.
Europlus has not been making the required monthly instalments to the Sinking Fund Account. According to the Facility Agent, there is only around RM6.0 million in this account, instead of the required RM81.4 million by 31 August 2005. The current outstanding amount is RM196.0 million. The Noteholders of the MUNIF had agreed to withhold the declaration of Cancellation Event for six months from August 2005, pending completion of a re-financing plan.
In addition, the current proposed disposal of 25% equity interest to IJM, which is viewed as a key solution to their cashflow difficulties, is contingent upon the fulfilment of certain conditions precedent including the signing of West Coast Highway Concession Agreement. Upon completion, IJM would be able to help resuscitate many of the development projects. However, the proposal is now extended to 30 November 2005 delaying any form of immediate relief to Europlus’s debt servicing pressures.
MARC will continue to monitor developments and assess their impact on the rating.