MARC has issued a rating update on its CID rating on Tracoma Holdings Berhad’s (Tracoma) RM100 million Restructured Bai’ Bithaman Ajil Islamic Debt Securities (BaIDS) following Tracoma’s announcement on March 2, 2010 that it had become an affected listed issuer pursuant to Bursa Malaysia Securities Berhad’s (Bursa Malaysia) Practice Note 17 (PN17).

Based on Tracoma’s full year unaudited results for the 12 months ended December 31, 2009, the group continues to record losses, albeit lower with pre-tax losses of RM13.4 million (FY2008: pre-tax loss of RM76.5 million) on revenue of RM132.5 million (FY2008: RM157.0 million). As a result, its shareholders’ equity declined to RM11.4 million (FY2008: RM22.3 million), below the minimum capital requirement of Bursa Malaysia which requires the group to maintain a consolidated shareholders’ equity of not less than 25% of the company’s issued and paid-up capital. Additionally, its debt-to-equity ratio has worsened to 13.1 times (1HFY2009: 8.1 times).

As a PN17 company, Tracoma is required to submit a regularisation plan to Securities Commission (SC) within twelve months of the First Announcement and, upon approval by SC, implement the regularisation plan within the agreed timeline, failing which it will be delisted from Bursa Malaysia.

Tracoma’s principal activity is as an investment holding company with subsidiaries involved in the manufacture of automotive parts and components.

MARC will continue to monitor the status and developments pertaining to Tracoma’s debt restructuring proposal and its rating implications.

Contacts:
Francis Xaviour Joe, 03-2090 2279 / fxjoe@marc.com.my;
Ryan Lee Ju Vern, 03-2090 2230 / juvern@marc.com.my