Zetrix AI faces risk of default on RM2 billion sukuk after covenant breach
Zetrix AI Bhd faces a Thursday deadline to remedy a covenant breach that could trigger a payment default under its RM2 billion wakalah sukuk programme. The issue arose after its managing director ceased to be the largest shareholder, putting pressure on the company’s financing position if a waiver is not obtained.
Highlights
- Zetrix AI risks defaulting on its RM2 billion sukuk after Wong Thean Soon ceased to be the largest shareholder following a forced share sale.
- If the covenant breach is not remedied by Thursday, the company must seek sukukholders’ approval for a waiver or further directions.
- If a waiver is not obtained, sukukholders can demand immediate repayment of the RM2 billion principal and RM164.5 million in future coupons, increasing Zetrix’s liquidity risk.
This article was translated from the original. Read the original version by our correspondent here.
Covenant breach and next steps
As reported by The Edge Malaysia, the breach arose after Wong Thean Soon ceased to be the largest shareholder following a forced share sale, according to the company’s response to a Bursa Malaysia query on Oct 16. His direct and indirect shareholding fell from nearly 30% to 1.895% as at Oct 15.Under Zetrix’s RM2 billion wakalah sukuk programme, he is required to remain the largest shareholder. If the breach is not remedied by Thursday, the company said it will seek sukukholders’ approval to waive the covenant or request further directions on the steps to take.
Implications for sukukholders and financing
Without a waiver, an event of dissolution could be triggered, allowing the sukuk trustee to demand immediate repayment of all outstanding amounts. This includes RM2 billion in principal and RM164.5 million in future coupon payments.The development puts the focus on Zetrix’s ability to remain compliant with its financing terms and manage short-term liquidity risk. Any failure to obtain relief from sukukholders could add pressure on the company’s operations and access to capital markets.
In our earlier article, we discussed the pressure facing Zetrix AI Bhd after it was suspended as a JPJ collection agent and over issues involving more than RM200 million in payments allegedly not remitted. We also highlighted how the developments have drawn greater scrutiny to the company’s financial position, including concerns over its RM2 billion sukuk as Wong Thean Soon’s shareholding declined and the covenant required him to remain the largest shareholder.
-
Afghanistan
-
Albania
-
Algeria
-
Angola
-
Argentina
-
Armenia
-
Australia
-
Austria
-
Azerbaijan
-
Bahamas
-
Bahrain
-
Bangladesh
-
Belarus
-
Belgium
-
Bolivia
-
Botswana
-
Brazil
-
Brunei
-
Bulgaria
-
Cambodia
-
Cameroon
-
Canada
-
Chile
-
China
-
Colombia
-
Congo
-
Costa Rica
-
Cote d'Ivoire
-
Croatia
-
Cuba
-
Cyprus
-
Czechia
-
DR Congo
-
Denmark
-
Dominican Republic
-
Ecuador
-
Egypt
-
El Salvador
-
Estonia
-
Eswatini
-
Ethiopia
-
Finland
-
France
-
Georgia
-
Germany
-
Ghana
-
Greece
-
Haiti
-
Hong Kong
-
Hungary
-
India
-
Indonesia
-
Iran, Islamic republic
-
Iraq
-
Ireland
-
Israel
-
Italy
-
Jamaica
-
Japan
-
Jordan
-
Kazakhstan
-
Kenya
-
Korea
-
Kuwait
-
Kyrgyzstan
-
Laos
-
Latvia
-
Lebanon
-
Lesotho
-
Libya
-
Lithuania
-
Luxembourg
-
Madagascar
-
Malaysia
-
Malta
-
Mauritius
-
Mexico
-
Moldova
-
Mongolia
-
Montenegro
-
Morocco
-
Mozambique
-
Myanmar
-
Namibia
-
Nepal
-
Netherlands
-
New Zealand
-
Nigeria
-
North Macedonia
-
Norway
-
Oman
-
Pakistan
-
Palestine
-
Panama
-
Papua New Guinea
-
Paraguay
-
Peru
-
Philippines
-
Poland
-
Portugal
-
Puerto Rico
-
Qatar
-
Reunion
-
Romania
-
Rwanda
-
Saudi Arabia
-
Serbia
-
Singapore
-
Slovakia
-
Slovenia
-
Somalia
-
South Africa
-
Spain
-
Sri Lanka
-
Sweden
-
Switzerland
-
Syria
-
Taiwan
-
Tajikistan
-
Tanzania
-
Thailand
-
Trinidad and Tobago
-
Tunisia
-
Turkey
-
UAE
-
Uganda
-
Ukraine
-
United Kingdom
-
United States
-
Uruguay
-
Uzbekistan
-
Venezuela
-
Vietnam
-
Yemen
-
Zambia
-
Zimbabwe
- Forex
- Crypto
