Friday, December 16, 2011

MARC raises concerns about Offshoreworks Capital, further downgrade seen

KUALA LUMPUR (Dec 16): Malaysian Rating Corp Bhd (MARC) has raised concerns about the funding vehicle Offshoreworks Capital Sdn Bhd whose ratings could face downgrade.

The ratings agency said on Friday it was maintaining its review of the BBIS and MARC-4IS Sukuk ratings of OWC for further downgrade.

MARC cited a continuing lack of clarity about the issuer's liquidity situation, annual and interim results of its parent company and the progress of debt restructuring negotiations with sukukholders.

In the past, MARC had commented that its ratings review would focus on the outcome of OWC's debt restructuring negotiations and the near-term financial profile of oilfield services provider Offshoreworks Holdings Sdn Bhd (OHSB).

However, MARC pointed out that since it decided to extend its review on the sukuk ratings in September 2011, OWC has yet to disclose the details of the proposed restructuring plans to its sukukholders.

Of concern is that OWC has yet to make available its audited financial statements of OHSB for the financial year ended Dec 31, 2010.

'MARC has been unable to conclude its review and believes that it has insufficient access to adequate public and/or non-public information to maintain ratings on the sukuk.

'OHSB's unaudited financial statements for 2010 had indicated that the group was in a tenuous financial position with negative shareholders funds of RM56.8 million and modest cash balances. The rating agency is concerned that OHSB's financial profile could have experienced further deterioration in its credit profile since then,' it said.

The rating agency said it would likely withdraw or suspend the ratings within the next 30 days if the requested information was not forthcoming.

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