Fitch slashes Serba Dinamik

Fitch Ratings said it downgraded Serba Dinamik Holdings Bhd.’s long-term issuer default rating to B- from BB-. At the same time, the agency lowered the senior unsecured sukuk due 2022 and 2025 to B- from BB- with an RR4 recovery rating. Fitch placed the ratings on rating watch negative.

“The downgrade reflects the pressure on SDHB's liquidity and the elevated refinancing risk from its short-term debt maturities in 2021 and its $222 million sukuk due May 2022. We believe the company's access to debt funding has been compromised after its auditor, KPMG, requested an independent review when a 2020 statutory audit raised multiple questions over the company's operations,” Fitch said in a press release.

The RWN considers the plans for the independent review and the uncertainty over completing the review, and the limited time to maturity of its bonds, the agency said.

“We expect to resolve the RWN following the completion of the review and the company demonstrating it has access to funding to enable it to refinance its upcoming debt maturities,” Fitch said.

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