KUALA LUMPUR: Malaysian Merchant Marine Bhd (MMM) has received a letter of demand from Prima Uno Bhd (PUB) and Malaysian Trustees Bhd (MTB) for the payment of an outstanding sum of RM40.31 million within two weeks in respect of a primary collateralised loan (CLO) transaction facility of RM40 million.

In a statement yesterday, MMM said it would be liable to pay default interest on the amount in default at a rate of 3% per annum above the prescribed rate of 6.88% per annum from the date of default up to the date of actual payment.

“MMM will be looking into steps to be taken in respect of the letter of demand,” it said.

MMM said PUB’s and MTB’s claim was made pursuant to the CLO which was entered into between RHB Investment Bank Bhd as the lender, MMM as the borrower and PUB as the issuer on Jan 8, 2007.

It said pursuant to a deed of assignment dated Jan 8, 2007, PUB had assigned and charged in favour of MTB all its present and future rights, titles and interests in and to the receivables and proceeds under the agreement, together with payment and enforcement rights with respect of it.

MMM said MTB had terminated the CLO facility following the downgrading of the Bithaman Ajil Islamic debt securities rating to BB+ on Feb 4, 2010 and MMM was required to prepay the CLO together with accrued interest and all monies payable under the facility.


This article appeared in The Edge Financial Daily, March 12, 2010.