MARC is issuing this rating update as part of its ongoing surveillance on Talam Transform Berhad's (Talam) Settlement Bithaman Ajil Debt Securities (Settlement BaIDs). MARC notes that Talam’s wholly-owned subsidiary, Ample Zone Sdn Bhd (Ample Zone), has now fully settled its Sukuk Al-Ijarah obligations on which the company missed principal payments in January 2012. With this full settlement by Ample Zone on its senior debt obligation, the risk of cross-default on Talam’s Settlement BaIDs obligations has been uplifted.

Going forward, any further improvement on the Settlement BaIDs’ B-ID/stable rating will hinge on Talam’s ability to reduce its still sizeable financial obligations and achieve a sustainable business turnaround. The group’s total borrowings (excluding Ample Zone’s borrowings), and trade and other payables remain high at RM253.5 million and RM895.7 million respectively as at end-July 2014.

Contacts:
Joan Leong, +603-2082 2270/ joan@marc.com.my;
Yap Lai Ken, +603-2082 2247/ laiken@marc.com.my.