MARC had on 29 December 2006 placed Intelbest Corporation Sdn Bhd’s (“Intelbest”) RM50.0 million MUNIF on MARCWatch with developing outlook with regards to Abrar Discount Berhad’s (“Abrar”) announcement on Bank Negara Malaysia’s (“BNM”) instruction to Abrar to cease operations. However, MARC understands that the cessation of Abrar would not have an impact on the roll over of the MUNIF on 21 February 2007.
Nevertheless, MARC is revising the developing outlook on Intelbest’s RM50.0 million MUNIF and placing its RM110.0 million BaIDS and the RM50.0 million MUNIF on MARCWatch negative.
The MARCWatch negative is assigned following a letter dated 17 January 2007 from the trustee stating the latest balance in the Redemption Account (“RA”) stood at RM4.2 million as at 31 December 2006.
The redemption of the Series 1 BaIDS of RM20.0 million and the remaining MUNIF of RM24.0 million will be due in February and March 2007 respectively. As required under the issue structure, there should be sufficient amount in the RA one month prior to the redemption date. The shortfall in the RA is primarily due to the stop work order issued by the Authorities on 1 June 2006 following the land slide incident at Ukay Bistari.
MARC was informed by the issuer that a bondholders’ meeting will be held on 26 January 2007 to vote on an extension of time for Intelbest to meet the said payment obligation.

The MARCWatch negative is also premised on the trustee’s confirmation that certain financial covenants have not been complied with due to the financial accounts for the year ended 2005 and 2006 have not been finalized. Currently, discussion between the issuer and the auditors are still on-going.

MARC will closely monitor the developments and will assess their impact on the current rating. Any ratings implications arising therefrom will be advised in due course.