Sometimes a loss arrives not as a single shock but as a sentence written carefully in a memo, and so it was this week, when the managers of four savings funds told their unitholders that a sukuk once counted among their holdings was now worth nothing on the books. A default by Zetrix AI on a RM25.68 million payment had cast doubt over an entire RM2 billion programme, and with no auditor to vouch for the company's standing and no settlement date in view, the managers judged that prudence allowed no other value. The fund-holders now wait, carrying a reduced number on their statements and a hope,
AmanahRaya Fund Manager Writes Off Entire Zetrix Al Sukuk Holdings Across Four Funds
"We know this is difficult news."
Mark
Why does a write-off to zero matter so much for ordinary unitholders?
Mimi
Because it shows up directly in their holdings. Net asset value per unit as of November 10 sits between 66.11 and 94.08 sen across the four funds, and dealings are frozen until November 23.
Mark
ARIM says it hasn't given up on the money, though.
Mimi
Right. Nil is an accounting valuation, not a waiver. Any recovery gets added back to the net asset value for unitholders at the time it arrives.
Luke
Worth noting that's a promise of process, not of outcome. ARIM itself says recovery is not assured.
Mark
What made ARIM choose zero rather than a partial haircut?
Mimi
It said it had no reasonable basis for any recoverable amount: no settlement date, an uncertain financial position, and no external auditor at Zetrix.
Luke
That's ARIM's reasoning, and the reporting doesn't tell us how other holders are valuing their positions. We also don't know why Zetrix missed the payment.
Mark
The missed payment was RM25.68 million on a RM2 billion programme. Why write off everything?
Mimi
A dissolution event lets holders demand all amounts under the whole programme, so every series the funds hold rides on the same outcome.
Luke
And the source doesn't say how much of the funds' assets the sukuk represented, so we can't say how big the hit is beyond the stated per-unit values.
O Pulso
- A RM25.68 million default by Zetrix AI has pushed four AmanahRaya funds to write their sukuk down to nil, effective November 10.
- Unit values have fallen to between 66 and 95 sen, leaving unitholders staring at losses they did not choose.
- With MARC downgrading the entire RM2 billion programme to default and Bond Pricing Agency Malaysia no longer quoting prices, the market has gone dark on the paper.
- Every series under the programme now rides on the same uncertain outcome, so recovery depends on a company with no external auditor.
- Dealings are frozen until November 23, and the managers promise redemption details that the anxious will be watching closely.
Sometimes a loss arrives not as a single shock but as a sentence written carefully in a memo, and so it was this week, when the managers of four savings funds told their unitholders that a sukuk once counted among their holdings was now worth nothing on the books. A default by Zetrix AI on a RM25.68 million payment had cast doubt over an entire RM2 billion programme, and with no auditor to vouch for the company's standing and no settlement date in view, the managers judged that prudence allowed no other value. The fund-holders now wait, carrying a reduced number on their statements and a hope, not yet a promise, that something may yet be recovered.
A memo landed in investors' inboxes this week, and its opening line said plainly what everyone was feeling: this is difficult news. AmanahRaya Investment Management, known as ARIM, had written the sukuk issued by Zetrix Al Bhd down to nothing across four of its funds, a decision that took effect on November 10 and now shows in each fund's unit price. Those prices had already slipped to between 66 and 95 sen, depending on the fund.
The trigger was a missed payment of RM25.68 million on November 6. The default was on a single tranche, but it opened a wider danger, because a payment default lets sukukholders call in everything due under the whole programme. MARC has since cut the RM2 billion programme to default and withdrawn its coverage, and the price agency has stopped quoting the paper. With no confirmed settlement date and no external auditor to confirm Zetrix's position, ARIM said it could find no reasonable basis to assign any recoverable value.
Yet the manager was careful to say that nil is not surrender. The funds keep their rights to principal and profit, and any money recovered will be added back to net asset value for the unitholders of the day. ARIM was equally clear that recovery is far from assured. Dealings stay suspended until November 23, and further notice on redemptions and resumption is promised. Zetrix itself now faces investors, bondholders, regulators and the government, and its shares have lost more than 90% this year.
A memo sent to investors this week opened with a sentence no fund manager wants to write: "We know this is difficult news." AmanahRaya Investment Management Sdn Bhd, known as ARIM, told unitholders in four of its funds that it had written the sukuk issued by Zetrix Al Bhd down to nothing. The memo was sighted by The Edge.
The write-off took effect on November 10 and is reflected in each fund's net asset value per unit. The trustees of the affected funds approved the change in valuation, according to ARIM. The four funds are the AmanahRaya Unit Trust Fund, the AmanahRaya Syariah Trust Fund, the AmanahRaya Mixed Asset Syariah Conservative Income Fund and the AmanahRaya Syariah Income Fund.
On that date, net asset value per unit stood at 66.86 sen for the Unit Trust Fund and 66.11 sen for the Syariah Trust Fund. The Syariah Income Fund was at 72.63 sen, and the Mixed Asset Syariah Conservative Income Fund at 94.08 sen.
The trigger was a payment default on November 6. Zetrix failed to pay RM25.68 million due on a sukuk wakalah it had issued. MARC Ratings has since downgraded the RM2 billion sukuk programme to default status and withdrawn its coverage of the company. As of November 10 the payment was still outstanding, with no settlement in sight. Bond Pricing Agency Malaysia stopped providing prices for the sukuk the same day.
ARIM explained its reasoning. It said it could not establish a "reasonable basis" for recognising any recoverable amount, because there is no confirmed settlement date and Zetrix's financial position is uncertain. It also noted that Zetrix has no external auditor to confirm that position. So the fair value was set at nil.
The missed payment concerns one tranche, but the problem is wider. A dissolution event arising from a payment default lets sukukholders demand immediately all amounts due under the entire programme. ARIM said recovery on every series the funds hold therefore hinges on the same uncertain outcome.
ARIM stressed that nil does not mean surrender. The funds have not given up their rights to the principal and profit owed under the sukuk, and the manager said it will keep pursuing available avenues for recovery. Anything recovered will be added back to the net asset value when received, for the unitholders at that time. ARIM also cautioned that recovery is not assured.
Dealings in the four funds remain suspended until November 23. ARIM said it will give further notice on redemption arrangements and on when dealings will resume.
Zetrix AI is now under scrutiny from investors, bondholders, authorities, regulators and the government, and its shares have lost more than 90% of their value so far this year. The next markers are the November 23 end of the suspension and whatever ARIM announces on redemptions.
Citações Notáveis
We know this is difficult news.— ARIM memo to investors
ARIM will continue to pursue the available avenues for recovery.— ARIM, fund manager
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Leia o original em The Edge Malaysia ↗