MARC, with immediate effect, is revising Ample Zone Berhad’s (AZB) RM150 million Sukuk Al-Ijarah (Sukuk) from MARCWatch developing to MARCWatch negative. AZB’s Sukuk is currently rated at AA+ID for RM50 million Class A; AID for RM25 million Class B; and BBID for Class C. The MARCWatch negative is premised on the continued non rental payment from Talam Corporation Berhad’s (TCB) subsidiaries, being the major tenant in Menara Maxisegar, ie one of the four properties (Menara Maxisegar, Wisma Talam, Midpoint Shopping Complex and Pandan Kapital Shopping Complex) secured under the transaction. Due to the continued non-rental payment from TCB’s subsidiaries since August 2005, MARC is of the view that the impending profit payment of RM6.1 million and the first partial redemption of RM2.5 million due in January 2007 will place a greater strain on AZB’s cash flow despite an expected payment of RM3.3 million from TCB in January 2007. This is because the RM3.3 million represents approximately 30% of the outstanding rental from TCB’s subsidiaries as at November 2006 coupled with the uncertainty of TCB’s subsidiaries ability to regularise its rental payments in the short term. Nevertheless, MARC notes that the balances as at 19 December 2006 in the Collection Account & Sub-Lease Collection Accounts and Sukuk Profit Reserve Account amounting to RM4.3 million and RM12.7 million respectively are more than sufficient to cover the immediate debt obligations due in January 2007 as well as July 2007. MARC is commencing AZB’s annual review, whereupon an assessment will be made on the cash flow stream of the four properties and the credit standing of TCB.

MARC further notes that following objections from the Sellers of the four properties with regards to the appointment of a monitoring agent, the sub tenants are now required to deposit the rental directly to the respective sub lease collection accounts to ensure that the rental collections from the four properties are appropriately monitored. MARC has been informed that TCB is currently in the midst of negotiations to dispose two of the properties; Wisma Talam and Pandan Kapital Shopping Complex. Accordingly, following a sukukholders meeting on 8 November 2006, the sukukholders had principally resolved to allow the disposal of any of the assets prior to the expiry of the Sukuk.