KUALA LUMPUR (Sept 3): Cypark Resources Bhd (KL:CYPARK) is deferring its periodic distribution for its RM235 million tranche 1 perpetual sukuk due Wednesday (Sept 4), as it wants to dedicate all resources to meet the commercial operations date for its 60MW floating solar plant in Kelantan.

In a statement, Cypark said the deferment is permissible under the sukuk’s terms.

This is the second time it has deferred the distribution, after deferring a similar payment on March 4 this year. At the time, the deferment was for six months to Sept 4.

In total, Cypark has RM500 million of perpetual sukuk. The balance RM265 million was subscribed last year by its current largest shareholder, Jakel Capital with 21.47% stake in the green energy outfit.

Cypark added in its statement that it has sufficient cash flow to achieve COD of its projects despite the deferment. The 60MW Danau Tok Uban solar plant is expected to be completed by the end of this year. This is a slight delay from its 3Q2024 target announced in June for the project, which was awarded with initial deadline of end-2021.

Earlier in June, Cypark completed a separate 100MW solar plant in Terengganu after a two-year delay.

“Despite the deferment, the tranche 1 perpetual sukuk remains secured by 95% cash sweeps from the revenue generated by four identified solar power plants. The total bank balances in the designated accounts amount to RM101.96 million as of Aug 31, 2024,” Cypark said.

The perpetual sukuk carried an initial fixed periodic distribution rate of 6.5% per annum payable on a semi-annual basis in arrears, Cypark’s annual report showed.

The coupon rate may increase by 2% from its first call date on Sept 3, 2027, then at 1% for subsequent periods to up to 15%, according to its publicly available bond information.

In the last twelve months ended April, Cypark paid RM14.59 million in perpetual sukuk distribution. Finance costs totalled RM33.44 million.

Total borrowings stood at RM1.487 billion, against cash of RM153.21 billion.

Based on its net debt position of RM1.33 billion and total equity of RM1.2 billion, net gearing stood at 1.1 times (with the perpetuals categorised as equity).

“In aligning funding facilities against long-term concession assets, the company is undertaking a debt refinancing exercise with an intent to lower its effective borrowing costs,” it said.

Shares of Cypark last traded down half a sen or 0.75% at 66.5 sen at noon market break, giving it a market capitalisation of RM547.18 million. The counter is down 29.6% this year.