KUALA LUMPUR (Oct 9): Ahmad Zaki Resources Bhd (KL:AZRB) has reached an amicable settlement with AmBank (M) Bhd and AmBank Islamic Bhd over a combined RM69.3 million in outstanding payments owed by its wholly owned subsidiary Ahmad Zaki Sdn Bhd (AZSB).

The lenders had filed civil suits against AZSB as debtor and Ahmad Zaki Resources as guarantor, the engineering and construction group said in a bourse filing on Friday.

AmBank Islamic sought to recover RM30.84 million, while AmBank claimed RM38.46 million. The subsidiary defaulted on payments under the financing facilities in June last year.

Ahmad Zaki Resources attributed the default to temporary cash-flow constraints at AZSB, which affected its ability to meet its payment obligations.

The parties have since reached a settlement and consent judgments were subsequently entered, the group said. It does not expect the legal proceedings to have a material adverse effect on its business, financial position or operations.

Ahmad Zaki Resources said it has not received any notice from other financiers alleging a cross-default arising from the payment default as of Friday.

AZSB is not a major subsidiary of the group, contributing 6.8% of assets employed, below the 70% threshold, according to Ahmad Zaki Resources.

Shares of Ahmad Zaki Resources closed unchanged at 8.5 sen on Friday, valuing the group at RM55.91 million. The stock has declined 46.88% so far this year.