MARC has placed the MARC-2 ID /A- ID ratings of Hytex Integrated Berhad’s (HIB) Murabahah Underwritten Notes Issuance Facility/Islamic Medium Term Notes (MUNIF/IMTN) of up to RM100.0 million on MARCWatch Negative. The MARCWatch placement reflects rising debt levels which have resulted in a debt to equity ratio of 1.49 times that is close to the covenanted cap of 1.50 times and could lead to a potential breach of covenant. HIB had incurred more debt to construct a RM52.7 million integrated plant in China. The plant has been completed and has commenced production.

HIB is an integrated garment manufacturer and retailer with operations in Malaysia, Cambodia and China. Its businesses comprise OEM (original equipment manufacturing), ODM (original design manufacturing), OBM (original brand manufacturing) and others. Its OEM products are exported whilst its other business segments (ODM/OBM/others) cater for domestic retail sales.

MARC is carrying out its annual review for HIB’s MUNIF/IMTN and will resolve the MARCWatch placement upon completion of the review.