MARC’s AID rating on Antara Steel Mills Sdn Bhd’s (Antara) RM500 million Bai’ Bithaman Ajil Islamic Debt Securities (BAIDS) Programme remains on MARCWatch Negative pending finalisation of our ongoing rating review. The BaIDS had been placed on MARCWatch Negative on February 3, 2009 due to concerns over the financial impact of the shutdown of Antara’s Labuan-based Hot Briquetted Iron (HBI) plant since October 2008.

Since our last rating action, MARC has been informed that Antara’s HBI plant has resumed operations in February 2009. MARC expects greater clarity to be obtained with regard to the impact of the plant shutdown on Antara’s financial profile upon release of its interim results for the nine months ended March 31, 2009. The interim results will likely be available before end-June 2009.

MARC will be focusing on the key credit measures of Antara such as projected debt service coverage, leverage, as well as its liquidity sources relative to cash flow requirements in resolving the MARCWatch Negative placement.

Contacts: 
Francis Xaviour Joe 03-2090 2279/ fxjoe@marc.com.my;
Ruben Khoo, 03-2090 2265/ rubenkhoo@marc.com.my