PETALING JAYA: Maju Holdings Sdn Bhd’s subsidiary Bright Focus Bhd is proposing a sukuk-restructuring exercise to improve the weak structure of the Islamic debt issue.
It involves a sukuk-to-sukuk swap and the issuance of a new sukuk.
Bright Focus, which holds the concession for Maju Expressway (MEX), is also planning to buy back the current sukuk of RM1.225 billion at full nominal or par value.
“Bright Focus Berhad has engaged several international banks to implement the proposed restructuring scheme within the next 90 days, subject to the necessary due diligence by the banks,” said Bright Focus in a statement today.
The sukuk-restructuring exercise comes after the downgrade of Bright Focus’ rating to ‘BB1’ recently. It explained that the downgrade is not reflective of the expressway itself, but the weak structure of the terms of the sukuk.
“The downgrade is due solely to reduced cash reserves due to unscheduled advances to Maju Holdings.”
RAM Ratings had said that the downgrade was premised on the severe impairment in Bright Focus’ debt-servicing metrics following further unanticipated advances by its 96.8%-held subsidiary, Maju Expressway Sdn Bhd (MESB), to the ultimate parent company Maju Holdings Sdn Bhd, in addition to a deterioration in MESB’s projected annual cash flow.
Bright Focus said on a standalone basis, MEX is a performing highway from a perspective of its ability to meet all its obligations under the current sukuk in a timely manner.
“Bright Focus, and by virtue of that Maju Holdings Sdn Bhd, is in a solid financial position to undertake this restructuring programme, which will address the weakness in the current terms of the sukuk. The group is committed to good corporate governance practices and will ensure that sukuk holders’ interests are protected and all obligations are repaid in full in a timely manner.”
Once the proposed restructuring is completed, it expects to see an improvement in its rating for the sukuk.