TS Wong's Zetrix AI Stake Down to 1.841% Before Oct 22

Quick Answer: TS Wong’s direct and indirect stake in Zetrix AI Bhd fell to 1.841% after a disposal of 460,000 shares at 5 sen each, just days before the Oct 22 deadline to fix the Zetrix AI sukuk covenant breach. If the breach is not resolved, early repayment could be triggered on a potential liability of RM2.16 billion, against RM541.6 million in cash as at end-June.

Why Did TS Wong’s Zetrix AI Stake Fall to 1.841%?

TS Wong's Zetrix AI stake down to 1.841% ahead of Oct 22 deadline to fix sukuk covenant — Zetrix AI managing director TS Wong’s stake has shrunk to 1.841%.

Zetrix AI Bhd managing director Wong Thean Soon disposed of 460,000 shares at 5 sen each for RM23,000, according to a bourse filing on Wednesday. His direct stake is now 0.541%, or 42.72 million shares.

His investment vehicle, Asia Internet Holdings Sdn Bhd, owns another 1.3%, or 102.7 million shares. Combined, Wong’s stake is 1.841%, down from more than 30% before a sudden share price drop in late August triggered margin calls on his share-backed financing facilities.

Wong told The Edge Malaysia the disposals were not voluntary. He is considering legal action over suspected collusion and share price manipulation.

TS Wong's Zetrix AI Stake Down to 1.841% Before Oct 22 — Photo: TheEdge

What Is at Stake in the Zetrix AI Sukuk Covenant Breach?

The breached sukuk condition hinges on Wong remaining the company’s largest shareholder. Zetrix AI has until Oct 22 to remedy the breach.

If it cannot, the group will seek sukuk holders’ approval for a waiver. Without one, early repayment could be triggered on the following:

RM2 billion principal
RM164.5 million in future coupon payments
Total potential liability of RM2.16 billion

How Much Cash Does Zetrix AI Have Against Its RM2.19 Billion Borrowings?

As at end-June, Zetrix AI reported the following:

Cash: RM541.6 million
Digital assets, including cryptocurrencies: RM532.88 million
Borrowings: RM2.19 billion
Trade and other payables and accruals: more than RM90 million

Cash covers about a quarter of borrowings, and digital assets are not cash. The sukuk exposure alone is close to the group’s entire cash balance multiplied by four.

Zetrix AI also owes the Road Transport Department RM314 million in unremitted collections, and police are investigating the matter.

Why Did Zetrix AI Withdraw Its 0.25 Sen Interim Dividend?

On Monday, Zetrix AI withdrew its planned first interim single-tier dividend of 0.25 sen per share for the financial year ending Dec 31, 2026.

The company cited the need to preserve working capital amid unexpected operational expenses. Investors tracking payouts can compare this with the Dividend Investing Guide before drawing conclusions about future distributions.

What Happened to Zetrix AI Shares on Wednesday?

Zetrix AI shares fell half a sen, or 9.09%, to close at 5 sen on Wednesday. That gave the company a market capitalisation of RM404 million.

The closing price matched the 5 sen price at which Wong disposed of his shares, so the RM23,000 sale was done at the prevailing market price.

Key Takeaways

TS Wong’s combined stake in Zetrix AI fell to 1.841%, from more than 30% before late August.
The Zetrix AI sukuk covenant breach must be fixed or waived by Oct 22.
Potential liability is RM2.16 billion, including the RM2 billion principal.
The 0.25 sen interim dividend was withdrawn to preserve working capital.
Unremitted collections owed to the Road Transport Department total RM314 million.

This article is for information only and does not constitute investment advice. Do your own research on Zetrix AI Bhd and the sukuk terms before making any decision about Bursa Malaysia-listed stocks.

Frequently Asked Questions

What is the Zetrix AI sukuk covenant breach?

Zetrix AI has a breached sukuk condition tied to TS Wong remaining the company’s largest shareholder. The company has until Oct 22 to remedy it, or seek sukuk holders’ approval for a waiver.

How much is TS Wong’s stake in Zetrix AI now?

Wong’s combined stake is 1.841% after he disposed of 460,000 shares at 5 sen each for RM23,000. His direct stake is 0.541% and Asia Internet Holdings Sdn Bhd owns 1.3%.

How much could Zetrix AI have to repay under the sukuk?

The potential liability is RM2.16 billion, made up of RM2 billion in principal and RM164.5 million in future coupon payments. This would apply if the breach is not resolved or waived.

Did Zetrix AI cancel its dividend?

Zetrix AI withdrew its planned first interim single-tier dividend of 0.25 sen per share for the financial year ending Dec 31, 2026. The company cited the need to preserve working capital amid unexpected operational expenses.

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TS Wong’s Zetrix AI Stake Down to 1.841% Before Oct 22