Serba Dinamik confirmed the default on its $222.22mn sukuk and revealed that the incident may affect the group’s financial performance. As per Bursa Malaysia, the sukuk holders are entitled to seek compensation for 25% of the aggregate face value of the sukuk which was expected to mature in May 2022. Serba also did not elaborate on its inability to produce a solvency declaration as demanded by the exchange. As per sources, Serba is currently firming up plans to alleviate its financial concerns and for the first time, it cited cash flow constraints, attributable to Covid-19, as reasons for its failure to fulfil interest obligation. “Serba Dinamik group shall endeavor to continue its businesses and operations despite the default,” the group said, adding that its business operations are unlikely to be affected by the default. Serba triggered the ‘Practice Note 17 (PN17) Relief Measures’ after the default and will not be required to comply with the obligations for the next 18 months due to the support by Bursa Malaysia to help firms impacted by Covid-19.
Serba dollar bonds continue to stay at distressed levels of just over 12 cents on the dollar.
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