Zetrix AI faces sukuk liability risk as TS Wong's stake continues to decline

Highlights

Wong Thean Soon sold 600,000 Zetrix AI shares, reducing his overall stake to 1.887% and breaching the RM2 billion sukuk covenant that must be remedied by 22 Oct.
Failure to obtain a waiver for the breach could trigger early repayment of the RM2 billion principal and RM164.5 million in future coupon payments, resulting in potential liabilities of RM2.16 billion.
Zetrix AI's share price fell 9.09% to five sen on Monday, wiping out more than 90% of its market capitalisation since the end of August and leaving it valued at RM394.9 million.

This article was translated from the original. Read the original version by our correspondent here.

Share disposal and covenant deadline

The Edge Malaysia reported that Wong Thean Soon sold another 600,000 shares, reducing his stake to 1.887% and further complicating Zetrix AI's efforts to remedy the breach of its RM2 billion sukuk covenant. The covenant requires him to remain the company's largest shareholder by the 22 Oct deadline.

According to a Bursa Malaysia filing on Monday, the shares were traded at five sen each, with a total consideration of RM30,000. The disposed shares, equivalent to a 0.008% interest in the company, were held indirectly through Asia Internet Holdings Sdn Bhd.

Following the disposal, Wong holds 43.18 million shares directly, representing a 0.547% stake, and 105.83 million shares indirectly, or 1.34%, through Asia Internet Holdings. The company said last Friday that it would seek sukukholders' approval for a waiver if the breach cannot be remedied by 22 Oct.

Without a waiver, the breach could trigger early repayment of the RM2 billion principal, along with RM164.5 million in future coupon payments, bringing total potential liabilities to RM2.16 billion.

Market pressure and impact on the company

The latest disposal came after Zetrix AI announced on Monday morning that it was withdrawing its first interim single-tier dividend of 0.25 sen per share for the financial year ending 31 Dec 2026. The dividend, declared on 24 Aug, had previously been scheduled for payment on 20 Nov, but the company said the move was taken to preserve working capital following unexpected operating expenses.

The share sales also come as Wong faces a series of forced sales linked to margin calls on his share-backed financing facilities. These developments have sharply reduced his stake in the company from nearly 30% at the end of August.

Wong, better known as TS Wong, previously told The Edge Malaysia that the disposals were not voluntary and that he was considering legal action over suspected collusion and share price manipulation. The company's shares fell 9.09%, or half a sen, to five sen on Monday, a level last seen 14 years ago, with 108 million shares changing hands.

The price decline since the end of August has wiped out more than 90% of Zetrix AI's market capitalisation. Based on Monday's closing price, its market capitalisation stood at RM394.9 million.

In our earlier article on the suspension of Zetrix AI and MyEG as JPJ collection agents, we examined how issues involving more than RM200 million in payments allegedly not remitted have affected its core business operations and raised questions about the company's financial position. We also highlighted the pressure on the RM2 billion sukuk as TS Wong's stake declined due to margin calls, raising concerns over compliance with the covenant requiring him to remain the largest shareholder.

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