KUALA LUMPUR: Malaysian Rating Corporation Bhd (MARC) Lowered its rating on Malaysian International Tuna Port Sdn Bhd’s (MITP) RM240 million Bai’ Bithaman Ajil Islamic Securities (BA IS) to D ID from BB +ID and removed the rating from MARCWatch Negative, where it was first placed on Feb 19, 2009.

The ratings agency said on Wednesday, Nov 18 the downgrade followed MITP’s failure to make a Nov 17 profit payment on the BAIS.

A 60:40 joint venture company between Bindforce Sdn Bhd and Lembaga Kemajuan Ikan Malaysia (Fisheries Development Authority of Malaysia or LKIM), MITP is the holder of a 32-year concession to manage, operate and develop a tuna port at Batu Maung, Penang.

The port was to be developed into a fully integrated fisheries port by the year 2009 using the proceeds of the BAIS to finance the third phase of construction works at the port.

Work on MITP’s fisheries port was halted as a result of a stop-work order issued by Department of Environment in September 2007. With construction stalling and MITP’s sinking fund account (SFA) depleted due to draws made on the fund account to service earlier BAIS profit payments, MARC had earlier highlighted MITP’s increased vulnerability to missed payment on Nov 17 in the absence of full and timely financial support from the government.

Following the downgrade, MARC will discontinue rating surveillance on MITP’s BAIS.