MARC has extended its MARCWatch Negative placement in respect of Sistem Lingkaran- Lebuhraya Kajang Sdn Bhd’s (“SILK”) rating of B-ID on its Notional Amount of RM2.10 billion Al-Bai Bithaman Ajil Islamic Debt Issuance Facility (“ABBA”) (2001/2021).

MARC had placed SILK on MARCWatch Negative in May 2007 following confirmation from PB Trustee Services Sdn Bhd (the “Trustee”) that SILK had failed to meet the Annual debt Service Cover Ratio (“DSCR”) test of 1.25:1 as at 28 February 2007.  SILK initially sought bondholders’ indulgence until 31 May 2007 to allow time for all parties involved in a proposed restructuring plan to reach agreement.  SILK has sought a further indulgence until 21 August 2007 since no agreement has been reached.

MARC has been notified by the Trustee that a bondholders’ meeting would be convened shortly to evaluate refinancing and restructuring alternatives in anticipation of the upcoming RM150 million redemption under the ABBA facility on 22 August 2007. 

MARC will resolve the MARCWatch placement as soon as a resolution has been reached in relation to the restructuring plan and will continue to provide updates on SILK’s restructuring programme. 

SILK holds the concession for the Kajang Traffic Dispersal Ring Road, a 37-km long highway linking Kajang and the south-eastern part of the Klang Valley. The highway was completed in December 2004.