MARC has downgraded its rating on Ingress Sukuk Berhad’s (ISB) RM160 million Sukuk Al Ijarah to DIS from CIS. ISB is the funding vehicle of Ingress Corporation Berhad (Ingress). The rating of DIS reflects ISB’s failure to meet its first tranche sukuk payment of RM50 million in full based on the original scheduled maturity on July 9, 2009.

ISB has confirmed that it has made a partial payment of RM5 million on July 9, 2009 in line with its earlier agreement with sukukholders. The payment date of the balance of RM45 million due on July 9, 2009 has been deferred to January 9, 2010 (with the agreement of the majority of its sukukholders) to allow the group to complete its group-wide restructuring plan.

The Ingress group is principally involved in automotive components manufacturing, with modest exposure to the power engineering, railway electrification and the oil and gas sectors.

Notwithstanding the deferral of RM45 million of Sukuk repayments to January 9, 2010 the rating will remain at DIS until the deferred payments are fully met on the Sukuk given that no event of default has been declared with respect to the Sukuk and the redemption dates for the second and final tranche of the sukuk remains unchanged at July 9, 2010 and July 8, 2011. MARC believes the likelihood of further payment extensions remains high in light of the group’s pending financial restructuring and weakened credit profile; and expects to withdraw ISB’s rating upon completion of Ingress group’s debt restructuring programme.

Contacts:
Hafizan Haron 03-2090 2238/ hafizan@marc.com.my;
Lee Mei Lin, 03-2090 2259/ meilin@marc.com.my