KUALA LUMPUR, 23 September 2025 — Ireka Corporation Bhd (ICB) has defaulted on repayments totaling approximately RM1.04 million on financing facilities owed to Hong Leong Bank Bhd (HLBB) and AmBank (M) Bhd, the company disclosed in a filing with Bursa Malaysia.
The default relates to facilities originally granted to its now-wound-up subsidiary, Ireka Engineering & Construction Sdn Bhd (IECSB). Of the total default, RM675,000 is owed to HLBB under a contract overdraft/progress claim facility, while RM364,962.88 is owed to AmBank under a revolving facility.
Managing Cash Flow and Repayment Strategy
In its statement, ICB said that it is directing its limited resources toward completing ongoing projects and covering operating expenses to ensure the continuity of its business operations. The firm also confirmed that it has been actively negotiating with the financiers to reach mutually agreeable settlement terms.
Part of the resolution plan involves Ireka’s ongoing monetisation of assets exercise, proceeds from which will be partially used to regularise the defaulted repayments.
Legal and Regulatory Consequences
Hong Leong Bank has issued a letter of demand dated 18 September 2025 in its capacity as corporate guarantor, calling for full settlement of the arrears under an existing settlement arrangement. HLBB has reserved its legal rights to pursue recovery should Ireka fail to comply.
Additionally, Ireka will be required to submit a solvency declaration to Bursa Malaysia within three market days from the date of its announcement, signifying compliance with listing rules and confirming that it remains solvent despite the default.
Investor Implications and Outlook
For investors, this default brings attention to Ireka’s financial discipline and capacity to service its obligations. Defaults, even modest in absolute value, can erode investor confidence, affect credit terms, and trigger tighter scrutiny of cash flow forecasts.
On the other hand, the proactive approach, asset monetisation, negotiations with creditors, and maintaining project delivery, suggests that Ireka is seeking to manage the downside. Key metrics to watch will include the success of its asset sales, how quickly the default is resolved, and whether operating cash flow proves sufficient to avoid further defaults.
