MARC has announced an extension of its review of the Sukuk ratings of Offshoreworks Capital Sdn Bhd (OWC) arising from the continuing lack of clarity surrounding its parent company Offshoreworks Holdings Sdn Bhd's (OHSB) and the group's current financial position and business profile. MARC's decision to maintain its long-term and short-term Sukuk ratings of BBIS and MARC-4IS on OWC on MARCWatch Negative affects RM200.0 million of outstanding Sukuk Musyarakah and RM150.0 million of outstanding Musyarakah Commercial Paper/Medium Term Notes (MCP/MMTN).

Separately, MARC notes that the sukukholders have waived a financial covenant breach and an event of default under a sukuk covenant since its last rating action on June 14, 2011. The waivers and initiation of debt restructuring should mitigate near-term debt payment acceleration risk.

MARC is also extending the review for further downgrade of OWC's long-term rating to consider the implications of its debt restructuring plans and any accounting restatements following the release of OHSB's audited financial statements for the financial year ended December 31, 2010 (FY2010), expected next month. The rating agency understands that a financial adviser has been appointed to facilitate the debt restructuring process while an independent monitoring accountant has been appointed to monitor the group's financial performance.

MARC will resolve the MARCWatch Negative placement once sufficient information is made available to the rating agency to assess the group's current financial position and the efforts underway to address its depleted liquidity and capital levels.

Contacts:
Gary Lim Chun Pin, +603-2082 2243/ cplim@marc.com.my;
Francis Xaviour Joe, +603-2082 2279/ fxjoe@marc.com.my.