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Serba Dinamik says yet to receive default notice on its US$222 mil sukuk

KUALA LUMPUR (Dec 14): Serba Dinamik Holdings Bhd (Serba Dinamik) on Monday (Dec 13) said it has yet to receive any notice of default in response to its outstanding US$222 million sukuk.

The engineering solutions provider was responding to a query from Bursa Securities about a news report by The Edge on Friday (Dec 10), which quoted the Malaysian Rating Corp Bhd (MARC), that Serba Dinamik's subsidiary had defaulted on the the latter's US$7 million (about RM29.53 million) semi-annual coupon payment on the outstanding senior Islamic bond.

The rating agency was reported as saying that the coupon payment was due on Nov 9, and that Serba Dinamik had confirmed no payment was made during the 30-day grace period that ended on Dec 9. As such, MARC also downgraded Serba Dinamik's Islamic Medium-Term Notes (IMTN) rating to CIS from BBIS/Negative.

“Please be informed that Serba Dinamik Holdings Bhd and its group of companies have yet to receive any notice of default in respect of the outstanding US$222 million sukuk. The group shall update from time to time, should there be any new development,” Serba Dinamik said in its Monday filing.

Besides MARC, S&P Global Ratings also downgraded Serba Dinamik's credit rating, citing the missed coupon payment. Fitch Ratings did the same earlier on Nov 12, when it said Serba Dinamik had missed the interest payment on the 2022 senior unsecured sukuk and entered the 30-day grace period.

Trading in the shares of Serba Dinamik has been suspended since Oct 22, after it failed to disclose the findings of a special independent review undertaken by Ernst & Young Consulting Sdn Bhd (EY Consulting) about an audit issue flagged by its then external auditor KPMG in May about some allegedly questionable transactions worth over RM4.5 billion.

Since then, the group, which is in legal tussles with Bursa Securities and EY Consulting, as well as KPMG over the audit issue, has also failed to submit its annual report for the financial year ended June 30, 2021 on time, despite getting a one-month extension up to Nov 30 to submit the report, together with its annual audited financial statements, as well as auditors' and directors' reports.

The group's shares last settled at 35 sen, giving it a market capitalisation of RM1.3 billion.

Edited by Tan Choe Choe.

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