KUALA LUMPUR (Oct 29): Zetrix AI Bhd (KL:ZETRIX) told Bursa Malaysia in response to its queries that a dissolution event was triggered after it breached a covenant requiring managing director Wong Thean Soon to remain its largest shareholder.

However, the company is not required to immediately repay the outstanding amount under its RM2 billion sukuk programme.

Zetrix AI said it had made all payments due under the programme in accordance with the stipulated schedule and that no payment default had occurred as at the date of its announcement. Its next payment is for RM214 million in March 2027.

The company was responding to Bursa Malaysia Securities’ queries on whether the covenant breach had triggered a dissolution event, whether it was required to immediately repay the full outstanding sukuk amount, and whether an event of default had occurred.

Zetrix AI clarified that a payment default could arise if it failed to repay the full outstanding amount when the repayment became due and payable. The company said it would make an immediate announcement in accordance with Paragraph 9.19A of Bursa Malaysia Securities’ Main Market Listing Requirements if a payment default occurred.

Zetrix AI added that it would continue engaging with the sukuk trustee and sukukholders to resolve the outstanding matters in accordance with the programme’s terms and conditions.

Zetrix AI is grappling with the covenant breach following a sharp decline in Wong’s shareholding. Forced share sales triggered by margin calls on his share-backed financing facilities reduced his stake to about 1.84%, from nearly 30% prior to the selldown, causing him to lose his position as the group’s largest shareholder.

The company is expected to meet its sukukholders again after failing to resolve the covenant breach by the Oct 22 deadline. A meeting held on Oct 23 did not result in a resolution, with further discussions planned. The Edge reported in its latest issue, citing sources familiar with the discussions, that Wong is seeking a six-month extension to restore compliance with the shareholder covenant.

In response to Bursa’s query on the implications of the sukukholders’ failure to reach a resolution, Zetrix AI said the programme’s existing terms and conditions remained in force despite no resolution being passed at the Oct 23 meeting.

“The company will continue to engage with the sukuk trustee and the sukukholders to address the outstanding matters and will make further announcements on any material developments, where required,” it added.

Zetrix AI faces further changes to its board, with two more independent non-executive directors resigning after Wong Kok Chau stepped down earlier.

Datuk Othman Semail and Mohaini Mohd Yusof both resigned as independent non-executive directors, citing personal commitments, according to the company’s filings.

Wong Kok Chau had also cited personal commitments for his resignation. The group’s filing on Monday stated that he had no disagreement with the board and that there were no matters requiring shareholders’ attention.

The departure leaves the embattled company with only three board members, Wong, non-independent non-executive chairman Datuk Dr Norraesah Mohamad and non-independent non-executive director Datuk Mohd Jimmy Wong Abdullah.

Shares of Zetrix AI closed down half a sen or 5.88% at eight sen on Thursday, giving the group a market capitalisation of RM610.39 million. The counter has fallen over 90% since the start of this year. 

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