KUALA LUMPUR (Oct 26): Oil palm player Sarawak Plantation Bhd has secured a RM40 million Islamic facility to partly finance the development costs of its oil palm plantations throughout Sarawak.

More specifically, the facility will be used to partly finance the development cost of oil palm plantations and replanting cost on lands located in Sarikei, Mukah, Sibu, Niah and Miri, upgrading the Niah Palm Oil Mill and Mukah Palm Oil Mill, as well as for the construction of estate building(s) and infrastructure in the oil palm plantations.

In a filing with Bursa Malaysia on Thursday, Sarawak Plantation said its wholly-owned subsidiary Sarawak Plantation Agriculture Development Sdn Bhd has entered into a masters agency agreement, facilities agreement and memorandum of charge with AmBank Islamic Bhd for an Islamic banking facility of up to RM40 million.

The Islamic banking facility is the Murabahah Tawarruq Term Financing (TF-i) wherein the underlying contract is the Murabahah Tawarruq, with a tenure of up to eight years, inclusive of a grace period of three years followed by a five-year monthly principal instalments.

The facility will be available for utilisation up till June 30, 2025.

Shares of Sarawak Plantation were unchanged at RM2.05, giving the company a market capitalisation of RM574 million.