Press Releases MARC MAINTAINS MEDI INNOVATION SDN BHD’S ISLAMIC DEBT RATINGS ON MARCWATCH NEGATIVE

Thursday, Sep 17, 2009

MARC continues to maintain its ratings on Medi Innovation Sdn Bhd’s (MISB) RM100 million Islamic Medium Term Notes Issuance Facility (IMTN facility) and RM50 million Murabahah Underwritten Notes Issuance Facility/Islamic Medium Term Notes Issuance Facility (MUNIF/IMTN) of AID and MARC-2ID /A/AID/A respectively on MARCWatch Negative where they had been placed since June 17, 2009. While the initial MARCWatch action highlighted its weak cash flow generation ability which, coupled with an aggressive leveraged position to fund a rapid expansion programme, have strained its balance sheet, the continued MARCWatch placement incorporates our concerns about the timely conversion of the rated facilities to loan stocks pursuant to its proposed debt restructuring exercise. Failure to complete the debt restructuring exercise by October 31, 2009, the last day of the indulgence period granted by noteholders, in relation to the part deferment of its upcoming profit payment will likely result in heightened default risk.

MISB operates a chain of aesthetic clinics in Singapore and Hong Kong through its wholly-owned subsidiary, Astique Medical Pte Ltd. MISB is proposing to restructure the rated facilities by way of conversion into loan stocks of up to RM254.85 million, comprising redeemable convertible secured loan stocks (RCSLS) of up to RM235.85 million and redeemable convertible unsecured loan stocks (RCULS) of up to RM19.0 million. The proposal to issue RCSLS and RCULS, which need not be rated, is pending approval from Securities Commission.

MISB’s next scheduled redemption of Tranche 4 of the IMTN facility amounting to RM20.0 million is due in March 2010; however, its RM2.05 million profit payment is due on September 22, 2009. MARC has been informed that RM2.0 million of the upcoming profit payment will be likely rolled into the proposed loan stock issuance. MISB has obtained noteholders’ indulgence for the deferment of its RM2.0 million profit payment until the date of issuance of the proposed loan stocks or by October 31, 2009, whichever is earlier. The balance profit payment of RM50,000 to be paid on the original due date will be met from its internally generated funds.

MARC will monitor the progress of the proposed restructuring exercise and MISB’s ability to meet its payment obligations under the notes.

Contacts: Rajan Paramesran, 03-2090 2233/ rajan@marc.com.my; Elea Nor Zainal, 03-2090 2263/ elea@marc.com.my; Katherine Hee, 03-2090 2273/ hcmay@marc.com.my

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