May 25 2012
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MARC uplifts rating suspension of Trinity Corporation Berhad's (formerly known as Talam Corporation Berhad) settlement BaIDS, maintains B+ID rating on MARCWatch Negative
Since MARC announced the suspension of Trinity's rating on February 27, 2012, the rating agency has received pertinent information on Trinity from the company's management to conduct surveillance on the rating. MARC has initiated its review of Trinity's rating, which the rating agency has placed on MARCWatch Negative pending the outcome of wholly-owned subsidiary Ample Zone Sdn Bhd's (Ample Zone) negotiations with its sukukholders.
Ample Zone had earlier defaulted on its principal repayment of RM84.65 million under its Sukuk Ijarah obligations but its sukukholders have not declared an event of default. The company is in negotiation with sukukholders for indulgence to be granted on the basis of meaningful progress being made to dispose properties encumbered to the issue. Notwithstanding the ongoing progress, should Ample Zone's sukukholders declare an event of default, this would trigger a cross-default under Trinity's Settlement BaIDS. Accordingly, the MARCWatch Negative placement on the rating principally reflects heightened default risk for Trinity as a result of cross-default provisions in outstanding sukuk and debt issues of Ample Zone and Trinity.
For the 12 months ended January 31, 2012 (FY2012), the group registered improved revenue of RM632.3 million (FY2011: RM183.4 million) mainly due to disposal of land parcels. Excluding this, Trinity's revenue of RM286.7 million would mainly consist of progress billings from development activities, which rose to RM184.3 million in FY2012 (FY2011: RM77.5 million). Trinity narrowed its pre-tax loss to RM117.5 million, down from RM153.8 million in the previous year.
MARC will continue to monitor the progress of ongoing negotiations between Ample Zone and its sukukholders and take appropriate rating action where warranted. Should Ample Zone's sukukholders consent to a maturity extension, MARC will likely remove its B+ID rating on Trinity's Settlement BaIDS from the MARCWatch placement and affirm the rating with a stable outlook.
Contacts: Thian Chow Di, +603-2082 2280/ firstname.lastname@example.org; Rajan Paramesran, +603-2082 2233, email@example.com.
© Press Release 2012
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