Monday, Apr 10, 2006
MARC has placed Antara Steel Mills Sdn Bhd’s (“Antara”) RM500 million Bai’ Bithaman Ajil Islamic debt securities (BaIDS) on MARCWatch with Negative Outlook. Antara’s initial rating of A+ ID was assigned in August 2005. This action is based on Antara’s disclosure to MARC on 3 April 2006 on the shutdown of the groups HBI plant in Labuan since 31 October 2005 and the failure on the part of Antara to disclose this material development in a timely manner.
The cause of the plant shutdown was due to the rupture of a nitrogen tank at start up after a scheduled maintenance and upgrade in September 2005, which caused severe damage to the reformer, connecting piping and accessories, refractory, inert gas generator and buildings, requiring extensive repair. The total cost of repair and Business Interruption/ Loss of Profit is expected to be covered by Antara’s insurance policies.
Antara has advised that the plant is at the final stage of reinstatement and is expected to resume full operations by the 12 April 2006. MARC is reviewing the impact of these developments on Antara’s financial performance and current rating and will advise any rating implications in due course.
The cause of the plant shutdown was due to the rupture of a nitrogen tank at start up after a scheduled maintenance and upgrade in September 2005, which caused severe damage to the reformer, connecting piping and accessories, refractory, inert gas generator and buildings, requiring extensive repair. The total cost of repair and Business Interruption/ Loss of Profit is expected to be covered by Antara’s insurance policies.
Antara has advised that the plant is at the final stage of reinstatement and is expected to resume full operations by the 12 April 2006. MARC is reviewing the impact of these developments on Antara’s financial performance and current rating and will advise any rating implications in due course.