Oilcorp Berhad’s (Oilcorp) MARC-2ID/A-ID ratings on its RM70 million Murabahah Underwritten Notes Issuance Facility/Islamic Medium Term Notes Facility (MUNIF/IMTN) remain on MARCWatch Negative where they had been placed since July 30, 2008. The MARCWatch Negative highlights Oilcorp’s non-compliance with its obligation to issue timely audited accounts for the financial year ended December 31, 2007 (FY2007) and to submit quarterly financial information as required under the listing requirements of Bursa Malaysia Securities Berhad. This has affected MARC’s effectiveness in providing ongoing surveillance for the MUNIF/IMTN rating as well as a related RM200 million Murabahah Underwritten Notes Issuance Facility (MUNIF) available to its subsidiary, Straight A’s Portfolio Sdn Bhd (SAP) (rated MARC-1ID). The delay could also invite severe censure from the regulators.

MARC understands that accounting firm, Messrs BDO Binder, is currently conducting a re-audit of Oilcorp’s accounts for FY2007.

The Oilcorp group is involved in the oil and gas, property investment and deep-sea fishing sectors. Its first scheduled reduction of the MUNIF/IMTN amounting to RM20 million is due next year in October 2009 which would require Oilcorp to build up a sinking fund six months ahead of the redemption date. Meanwhile, SAP is a special purpose vehicle formed by Oilcorp’s wholly-owned subsidiary, Oil-Line Engineering & Associates Sdn Bhd (OLEA) for the purpose of securitising receivables from assigned contracts of OLEA and/or its subsidiaries.

MARC expects to resolve the MARCWatch following Oilcorp’s release of financial information required for our review of assigned ratings.

Contacts:
Hafizan Haron 03-2090 2238/ hafizan@marc.com.my;
Amy Teoh, 03-2090 2259/ amy@marc.com.my.