Zetrix AI sinks to five sen as RM2bil sukuk covenant breach looms

Zetrix AI Bhd's shares tumbled to a record low of five sen on Friday as the company faces the possibility of breaching its RM2 billion sukuk covenant. The stock had recovered slightly to 5.5 sen by market close, a 15.38% decrease from the previous day's close. The shares accounted for about 444.33 million in market capitalisation.

The latest decline followed the disclosure of managing director Wong Thean Soon no longer being the company's largest shareholder due to forced sales by banks. Wong's combined shareholding fell to 1.895% as of October 15, under the terms of the RM2 billion Sukuk Wakalah programme. The company has until October 22 to rectify the potential breach, or it will seek approval from sukukholders via an extraordinary resolution.

Discussions with the sukuk trustee are ongoing, and any material developments will be announced. Bursa Malaysia temporarily halted trading in Zetrix AI's securities at 9:19am on Friday following the announcement. The company's stock has plummeted 93.3% from its April high of 89.5 sen. On August 28, shares dropped by about 50% amid forced sales of shares pledged by Wong.

Concerns over Wong's diminishing shareholding and Zetrix AI's rising borrowings prompted MARC Ratings to place the company's RM2 billion Islamic medium-term notes programme on MARCWatch Developing in September. The rating agency noted a significant increase in Zetrix AI's borrowings, which rose to RM2.2 billion as of June 2026 from RM160.5 million in 2021, and a cumulative development expenditure of RM3.7 billion, accounting for about 56% of total assets.

MARC Ratings later revised Zetrix AI's MARCWatch status to Negative in early October, citing issues with transparency, governance, and insufficient information on borrowings and development expenditure. The company's troubles were exacerbated when the Road Transport Department suspended its services on October 5 due to outstanding remittances totaling RM314 million.

The company's expansion into artificial intelligence and blockchain technology has not offset the series of setbacks, despite reporting a net profit of about RM540 million in the first half of 2026.