Maybank accepts ecoWise’s request to withhold legal action; Al-Rajhi Bank revises credit facility

TWO banks that previously issued letters of demand against units of environmental solutions provider ecoWise, Maybank and Al-Rajhi Bank, have issued updates that the embattled company disclosed in a Tuesday (Jun 28) bourse filing.

Maybank, which had letters of demand against 2 of ecoWise’s subsidiaries in Malaysia, has accepted the company’s request to withhold legal action against the company, the Malaysian units and the security parties of the facilities concerned.

In a letter of forbearance dated Jun 24, Maybank laid out several conditions. These include each of the Malaysian subsidiaries making monthly payment of RM100,000 to Maybank for June and July, and monthly payment of RM125,000 for August and September. The units will also need to submit a “concrete and improved” repayment or restructuring proposal to Maybank by Sep 15.

The subsidiary specified in the letter will also need to provide an irrevocable letter of authorisation allowing Maybank full access and entry to its factory premises as and when required. In addition, Maybank expects a written confirmation by Al-Rajhi Bank that it is agreeable to withhold legal action against one of the Malaysian subsidiaries by Jun 30.

The letter of forbearance will be automatically terminated without notice if any of the Malaysian subsidiaries, ecoWise or security parties are hit with a winding-up petition or proceedings. ecoWise’s Malaysian subsidiaries have accepted these terms.

Separately, Al-Rajhi Bank on Jun 20 issued a revised letter of offer to a Malaysian subsidiary of ecoWise, which would revise a supply chain financing credit facility based on certain terms. The bank also previously issued letters of demand against the Malaysian units in March.

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One condition of the revised offer is that all overdue outstanding bills for one part of the facility, called SCF-i 1, are to be settled prior to the re-availment of the other part of the facility, SCF-i 2.

Another is that a monthly sinking fund build-up of RM100,000 in the form of a first-party term deposit is to be made over 6 months. Thereafter, the sinking fund required is to be increased to RM250,000, until the amount of financing made available in the revised offer for SCF-i 2 is fully secured. The first amount for the sinking fund is to be deposited from Jun 30. The Malaysian subsidiaries have also accepted this letter.

Shares of ecoWise have been suspended from trading since June 2021.