MARC Ratings has placed the AA-IS rating on Zetrix AI Bhd’s Islamic Medium-Term Notes Programme of up to RM2 billion on MARCWatch Developing, citing concerns over a sharp reduction in founder Wong Thean Soon’s shareholding and the group’s rising borrowings.
The rating agency said Wong’s stake in Zetrix AI has fallen to 12.1%, comprising a 6.5% direct interest and 5.6% indirect interest, from about 30% previously.
According to MARC, the reduction was largely triggered by margin calls and has significantly reduced Wong’s shareholding buffer against a positive covenant under the IMTN programme requiring him to remain the group’s single largest shareholder.
MARC said any further reduction in the founder’s stake could potentially result in a breach of the covenant.
The rating agency is also assessing Zetrix AI’s rapidly rising debt, with total borrowings increasing to RM2.2 billion as at end-June 2026 from RM160.5 million in 2021.
The borrowings have largely been channelled towards development spending on the group’s artificial intelligence-related services and blockchain platform.
Since Zetrix AI began blockchain development in August 2021, cumulative development expenditure has climbed to RM3.7 billion as at end-June 2026, from RM322.5 million in 2021.
The amount represents about 56% of the group’s total assets, MARC said.
While Zetrix AI continues to generate healthy operating cash flow, its debt-to-equity ratio increased to 0.50 times in 1H2026 from 0.10 times in 2021.
MARC noted that the impact of the increase in borrowings on leverage has been partly moderated by private placements and growth in retained earnings.
However, leverage could rise further as the group continues investing in robotics and potentially consolidates its Philippines venture following a memorandum of understanding signed on July 7, 2026 to develop public blockchain infrastructure using the Zetrix platform.
MARC said revenue from blockchain and AI-related services has been increasing since commercialisation began in 2023, but stressed that the business would need to scale in a timely manner to justify the level of capital deployed.
The rating agency said it would reassess Zetrix AI once there is greater clarity on the stability of Wong’s shareholding and the group’s earnings trajectory.
It is also evaluating how any further significant increase in borrowings to fund development spending could affect Zetrix AI’s balance sheet, earnings leverage and debt coverage metrics over the near to medium term.
MARC said the MARCWatch Developing placement will be resolved once there is better visibility on both the founder’s shareholding position and whether earnings remain sufficient to support debt coverage in line with the current rating.
