KUALA LUMPUR (Jan 7): MEX I Capital Bhd has proposed to issue two Islamic bonds or sukuk with a collective value of over RM3 billion under the Musharakah principle, according to the company’s lodgement with the Securities Commission Malaysia's (SC) website.

Maju Holdings Sdn Bhd-owned highway concessionaire MEX I said the proposed Islamic bonds comprise RM2.21 billion subordinated sukuk and RM1.13 billion senior sukuk programmes.

The filings by MEX I, however, did not specify the issuance dates and durations of the bonds, the securities' annual profit rates, and how the proceeds from the two bond issuances will be used.

"Pending issuance,” MEX I said.

The lodgement dates for the RM2.21 billion subordinated sukuk and RM1.13 billion senior sukuk programmes were on Wednesday (Jan 5) and last Friday, according to MEX I.

MEX I said the SC lodgement expiry date for the RM2.21 billion subordinated sukuk is on May 23 while the RM1.13 billion senior sukuk's is on March 30.

Alliance Investment Bank Bhd is the principal adviser for the two bond schemes, MEX I said.

In October last year, it was reported that MEX I had received approval from its sukuk holders to restructure its RM1.35 billion Islamic medium term note programme at its virtual extraordinary general meeting (EGM) on Oct 13, 2021.

MEX I managing director Mohd Faiq Abu Sahid was reported as saying the resolutions from the EGM marked a new beginning for its group-wide sukuk restructuring.

MEX I is the parent company of Maju Expressway Sdn Bhd (MESB), and the holding company of both MEX I and MESB is Maju Holdings.

Maju Holdings indicates on its website that the diversified group’s businesses include construction, property development and healthcare services.

"Established in 1977, the Maju Group under the stewardship of group executive chairman Tan Sri Abu Sahid Mohamed has diversified into synergistic areas of business, forming one of the most well-known conglomerates in Malaysia. It has participated in several key sectors of growth in the country, notably in construction, property, infrastructure, services and manufacturing,” Maju Holdings said.

According Maju Holdings’ and MESB's websites, MESB operates the 26km Maju Expressway (MEX) in the Klang Valley as a highway concession company, and is responsible for the construction, maintenance, management and operation of the highway.

MESB’s website indicates that MEX links Putrajaya and Cyberjaya with Kuala Lumpur.

"MEX is operated by MESB, the concessionaire that has been awarded a 33-year concession to operate the dual carriageway,” MESB said.

Besides MEX I, Maju Holdings also owns highway operator MEX II Sdn Bhd, which defaulted on the principal and profit payment on MEX II’s outstanding sukuk of RM1.3 billion on the Dec 31, 2021 due date.

CIMB Investment Bank Bhd, which is the facility agent of MEX II’s RM1.3 billion Islamic bonds, said 14 tranches of the securities have been suspended because CIMB has not received payment of the amounts due on Dec 31, 2021 under the outstanding sukuk which was issued under the Murabahah principle.

In a filing with Bank Negara Malaysia’s Fully Automated System for Issuing/Tendering (FAST) website, CIMB said: "Please be informed that we, as the facility agent, have not received payment of the amounts due on Dec 31, 2021 under the outstanding sukuk Murabahah.”

MEX II, which was established to undertake the proposed estimated 18km Putrajaya-KLIA Highway, is intended to be a three-lane dual carriageway that will start at MEX’s Putrajaya Interchange and merge onto the existing KLIA Highway, according to group’s website.

On Friday (Jan 7, 2022), Malaysian Rating Corp Bhd (MARC) analysts wrote in a note that MARC has downgraded its ratings on MEX II's RM1.3 billion Sukuk Murabahah Programme and RM150 million Junior Bonds to defaulted rating of D, from CIS/C. 

MARC said the rating action follows a non-payment on the principal and profit totalling RM107.8 million on MEX II’s outstanding sukuk of RM1.3 billion on the due date. 

"The non-payment is after two previous extensions granted by sukukholders in the past. MARC Ratings understands that the issuer had engaged with the sukukholders about a possible further extension of the maturity date to March 31, 2022 but failed to obtain their consent,” MARC said.