MARC is issuing this rating update in connection with its MARC-2ID /A-ID ratings on HIB’s RM100.0 million Murabahah Underwritten Notes Issuance Facility/ Islamic Medium Term Notes. Following MARC’s affirmation of the ratings on 14 November 2007 and revision of its ratings outlook to developing from stable, HIB was not able to restore its debt leverage and liquidity measures by end-January 2008 as anticipated. This was caused by  a prolonged delay in resolving an insurance claim, the proceeds of which were to be used in part to pare down its borrowings.

HIB is an integrated garment manufacturer that is involved in original equipment manufacturing (OEM), original design manufacturing (ODM), original brand manufacturing (OBM) and retailing. The group has diversified geographically through its manufacturing facilities in Malaysia, Cambodia and China.

MARC understands from HIB that the claim is in the final stages of processing. Meanwhile, its debt leverage ratio of 1.48 times as at December 31, 2007 remains close to the covenanted cap of 1.5 times.

MARC continues to maintain its developing outlook on the rating and will closely monitor developments in relation to its financial flexibility and liquidity measures, which remain weak. MARC will advise any rating implications in due course once the insurance claim has been finalised.