KUALA LUMPUR (June 16): Maju Expressway Sdn Bhd (MESB) is undertaking a restructuring exercise that is expected to be completed by early August.

"MESB is undertaking a restructuring exercise both at Mex1 Capital Bhd as well as at its subsidiary MESB Sdn Bhd," said NewParadigm Capital Markets Sdn Bhd, the financial adviser for the restructuring exercise.

The restructuring exercise would comprehensively address the liquidity issues faced by MESB resulting from the Covid-19 pandemic, a spokesman for NewParadigm said in a statement in response to an article on the matter in The Edge yesterday.  

"To provide context, Maju Expressway has been dealing with acutely lower traffic volumes due to the movement control order that is in place as a result of the Covid-19 pandemic," it said.

The sukuk holders are expected to vote on the restructuring exercise proposal by early July, said NewParadigm.

“As part of the restructuring exercise, the principal repayment of RM50 million due on June 15 will be suspended. However, all profit payments under the respective tranches remain current,” it added.

MESB, which is owned and operated by Maju Holdings Sdn Bhd, is the concessionaire of the 26km Maju Expressway, which links the Kuala Lumpur city centre with Cyberjaya and Putrajaya.

Alliance Investment Bank Bhd is the principal adviser/facility agent, while Messrs Adnan Sundra & Low is the legal adviser.

CIMB Investment Bank, the bond facility agent, said in a filing with Bank Negara Malaysia’s Fully Automated System for Issuing/Tendering (FAST) website that MESB has defaulted on its RM50 million bond principal after failing to redeem its outstanding amount.