Serba Dinamik’s coupon payment on sukuk due today

Serba Dinamik Holdings Bhd faces a US7 million coupon payment today, failing which a default will be triggered on its US$300 million (6.3%) Sukuk due in May 2022.

The payment was due on Nov 8, but the Sukuk has a covenant that gives a 30-day grace period for the payment to be made from the due date.

The US$300 million Islamic debt was issued by SD International Sukuk Ltd, an indirect wholly-owned subsidiary of Serba Dinamik.

The Sukuk also contains cross-default provisions with its other dollar-denominated 6.997% Sukuk due March 2025.

Fitch Ratings downgraded both Serba Dinamik’s long-term issuer rating and the May 2022 Sukuk to CCC- from B-due recently to diminished cash reserves, stretched liquidity and heightened refinancing risk.

The bid ask prices for the SGX listed Us$00 million Sukuk now is at 16-17 cents to the (US) dollar with investors taking a risk off mode on the bonds and Serba Dinamik shares following accounting concerns raised by its external auditors KPMG Ltd in May this year.

The company has yet to file the 12-month period financial accounts ended Dec 31, 2020 with Bursa Malaysia Securities move to suspend the trading of Serba Dinamik shares since late October. The shares were last traded at 35 sen a piece. – TMR