KUALA LUMPUR (Oct 20): SMJ Sdn Bhd, a wholly owned subsidiary of Chief Minister Incorporated of Sabah, has successfully priced its inaugural RM900 million Islamic medium-term notes. It was issued out of the company's multi-currency sukuk wakalah programme of up to RM10 billion in nominal value.
The sukuk wakalah has a tenor of between five and 15 years and carries a profit rate of between 4.23% and 4.67% per annum, said SMJ in a joint statement with AmInvestment Bank, the principal adviser and lead arranger for the sukuk programme.
The inaugural issuance was closed with an order book of RM3.5 billion translating to a bid-to-cover ratio of 3.9 times, subscribed by a diverse group of investors in Malaysia, the statement said.
“These cash flows enable the state government to diversify its funding sources, optimise the capital structure and support our growth strategy where SMJ will continue to acquire profitable and producing oil and gas assets,” said Sabah Finance Minister and SMJ chairman Datuk Seri Masidi Manjun.
Noting that there are a lot more untapped oil and gas resources in Sabah, Masidi believed the Sabah government, with SMJ’s help, will achieve greater revenue sharing, greater say and greater participation in the oil and gas development in the state.
Meanwhile, SMJ chief executive officer Dr Dionysia Kibat said the sukuk wakalah is a recognition of SMJ’s underlying financial strength and future growth.
“This success also demonstrates the strong interest and confidence in Sabah state and SMJ in undertaking oil and gas activities for the best interest of the state,” she added.
SMJ said it will acquire Sabah International Petroleum Sdn Bhd (SIP), which holds a 10% ownership stake in Petronas LNG9 Sdn Bhd that operates a liquefied natural gas (LNG) plant within the Bintulu LNG Complex, and use the sukuk proceeds to part refinance SIP’s existing borrowings.
AmInvestment was also one of the lead managers for the inaugural sukuk issuance, along with CIMB Investment Bank Bhd and Bank Pembangunan Malaysia Bhd.