MARC has placed M-Trex Corporation Sdn Bhd’s (M-Trex) MARC-3ID rating on its RM60.0 million Islamic Commercial Paper (ICP) Programme on MARCWatch Negative due to the significant refinancing risk that is associated with the company’s plans to redeem the outstanding ICPs of RM48 million by second quarter 2009. The MARCWatch Negative placement also highlights M-Trex’s failure to provide sufficient information for MARC to carry out its annual review exercise.

The ICP programme limit is scheduled to be reduced annually by RM15.0 million starting from March 8, 2009. The company has redeemed RM12.0 million of its ICPs in advance and has arranged for RM30.0 million of the outstanding RM48.0 million ICPs to be converted into a term loan and RM4.0 million to be refinanced by a bank. The remaining RM14.0 million is expected to be raised through property disposals and an additional loan which has yet to be secured. The refinancing of all outstanding ICPs was initially targeted for completion by end-2007 but has been considerably delayed. Its refinancing efforts remain beset with uncertainties amid current market conditions.

M-Trex is an investment holding company with interests in the manufacturing and sale of anodised surface treated panels for audio and video equipment, and the trading of replacement and consumable parts for the automobile and semi conductor industries.
 
The rating is currently being reviewed for potential downgrade and could be lowered on account of M-Trex’s inability to make sufficient progress in its refinancing efforts. MARC will continue to closely monitor the progress of the refinancing initiatives and will issue updates on material developments.

Contacts:
Khairul Muzamel Perera 03-2090 2247/ kevinkhairul@marc.com.my;
Francis Xaviour Joe, 03-2090 2279/ fxjoe@marc.com.my