KUALA LUMPUR (March 6): Cypark Resources Bhd confirmed that it has deferred a coupon payment due on Monday (March 4) for its subsidiary Cypark Renewable Energy Sdn Bhd, under a RM500 million Musharakah-based perpetual sukuk programme that it set up to finance four solar photovoltaic (solar PV) power plant projects.

The group said the move is to conserve cash flow, and to prioritise funds towards the completion and delivery of its 270MW solar projects in Kelantan and Terengganu in the second quarter of this year.

"The deferment, allowable by terms of the perpetual sukuk, is a strategic decision as part of  CRB's debt optimisation in aligning facilities against long-term concession assets," a Cypark spokesperson told The Edge when contacted about the matter.

News of it deferring the coupon payment was reported on Bondsupermart, a bond information platform, after midnight on Tuesday.

The spokesperson also assured that the group has "sufficient cash flow to achieve the COD (commercial operation date) of its ongoing projects", with the support of its major shareholder Jakel Capital Sdn Bhd, who subscribed for the lion's share of the sukuk — RM265 million  — in the fourth quarter of 2023, together with available banking facilities from its principal bankers.

RHB Investment Bank is the principal adviser/lead arranger for all three tranches of the unrated perpetual that was issued in 2020 and 2023.

Cypark Resources also said the sukuk remains secured as it takes 95% cash sweeps from revenue generated, amounting to RM86.5 million currently.

All three tranches of the sukuk carry a distribution rate of 6.5% per annum, with "stepped-up distribution rates" that include an additional 2% above the distribution rate starting from the first call date, and a yearly increase of 1% on each anniversary thereafter, capped at a maximum rate of 15% per annum. The first call date for tranche 1 (Series 1 to 4) of the perpetual sukuk is Sept 3, 2027.

Cypark is currently racing to complete its LSS2 floating solar project in Danau Tok Uban, Kelantan, and its LSS3 solar project in Merchang, Terengganu, which have seen several delays.

The LSS2 project's completion date was previously postponed by nine months to September 2022 from end-2021, while the LSS3's completion had been pushed to end-2022 from March 2022.

In an interview with The Edge last year, Cypark's management said the group would see improvement in its financials once the projects are completed.

“This time next year, when we deliver both the LSS projects, we will be a very different entity. There’s nothing like recurring revenue streams, right? Being actualised. And for both the LSS2 and LSS3, they are 21-year concession assets,” said its chairperson Ami Moris.

Cypark posted a net profit of RM1.3 million on a revenue of RM91.8 million in its six months ended Oct 31, 2023.