S&P cuts Serba Dinamik

S&P said it cut its ratings on Serba Dinamik Holdings Bhd. and its guaranteed senior unsecured sukuks due May 2022 and March 2025 to D from CC.

The grace period for the $7 million coupon payment expired Thursday. Serba did make a $500,000 payment on Nov. 23 leaving $6.5 million due.

“We lowered the issuer credit rating to D from CC because the default on its $222 million sukuk due May 2022 is likely to trigger a cross-default on its $180 million sukuk due March 2025 as well as long-term banking facilities. We estimate 70% of Serba's total outstanding debt as of Sept. 30, 2021, could be liable for immediate repayment,” S&P said in a press release.

“In our view, its ensuing court proceedings with ex-auditor KPMG PLT, stock exchange Bursa Malaysia and special independent auditor Ernst & Young Consulting Sdn. Bhd. will further hinder its access to external capital funding,” the agency said.

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