The Zetrix AI IMTN downgrade landed after Zetrix AI Bhd missed a RM25 million payment that fell due on the day of the announcement. MARC Ratings cut the RM2 billion Islamic Medium-Term Notes (IMTN) Programme to DIS, the lowest rung on its scale. The company now sits at the centre of a financial and governance review.
Why Did MARC Downgrade Zetrix AI’s IMTN to DIS?
The DIS downgrade followed an earlier decision on Oct 30 to lower the sukuk rating to CIS from BB+IS. MARC cited heightened uncertainty over the company’s ability to resolve a breach of its sukuk covenant.
The move came amid mounting financial and corporate governance concerns, including outstanding payment obligations and regulatory scrutiny. MARC Ratings said: “Accordingly, MARC Ratings will no longer provide analytical coverage on Zetrix AI.”
What Is the Sukuk Covenant Breach at Zetrix AI?
The breach centres on a requirement that founder and group managing director Wong Thean Soon remain the company’s single largest shareholder. Zetrix AI has yet to remedy the breach.
The company also has not secured a waiver from sukukholders, after a meeting on Oct 23 was unsuccessful. Two open issues now sit on top of the missed RM25 million payment.
What Deadlines Does Bursa Malaysia Set for Zetrix AI?
Bursa Malaysia issued two directives to Zetrix AI on the same day as the MARC downgrade:
- Nov 11: Disclose material information on its financial position and governance issues.
- Nov 23: Address non-payment of its 2025 final dividend.
For background on how dividend payouts work, read our Dividend Investing Guide. The Nov 11 disclosure is the first checkpoint worth monitoring.
What Does the DIS Rating Mean for Zetrix AI Shareholders?
DIS is MARC’s default rating, which signals that the programme has already defaulted. Shareholders now face three open items: the RM25 million payment, the covenant breach, and the unpaid 2025 final dividend.
With MARC Ratings withdrawing analytical coverage, the company loses one independent credit assessment. Watch whether Zetrix AI meets both Bursa deadlines and whether sukukholders grant a waiver.
Key Takeaways
- MARC Ratings cut Zetrix AI’s RM2 billion IMTN Programme to DIS after a RM25 million payment was not settled.
- The downgrade follows an Oct 30 cut to CIS from BB+IS over a sukuk covenant breach.
- The breach involves founder Wong Thean Soon’s requirement to remain the single largest shareholder, with no waiver after the Oct 23 meeting.
- Bursa Malaysia set Nov 11 for governance disclosure and Nov 23 for the 2025 final dividend.
- MARC Ratings will no longer provide analytical coverage on Zetrix AI.
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Disclaimer: This article is for information only and is not investment advice. Do your own research and consult a licensed adviser before making any investment decision.
Frequently Asked Questions
What is the Zetrix AI IMTN downgrade?
MARC Ratings downgraded Zetrix AI Bhd’s RM2 billion Islamic Medium-Term Notes Programme to DIS, its default rating. The downgrade followed the company’s failure to settle an outstanding RM25 million payment.
Why did MARC Ratings cut Zetrix AI’s sukuk rating on Oct 30?
MARC lowered the rating to CIS from BB+IS on Oct 30. The agency cited heightened uncertainty over Zetrix AI’s ability to resolve a breach of its sukuk covenant.
What deadlines has Bursa Malaysia set for Zetrix AI?
Bursa Malaysia directed Zetrix AI to disclose material information on its financial position and governance issues by Nov 11. It also must address non-payment of its 2025 final dividend by Nov 23.
Will MARC Ratings still cover Zetrix AI?
No. MARC Ratings said it will no longer provide analytical coverage on Zetrix AI following the DIS downgrade.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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