KUALA LUMPUR (July 2): PBA Holdings Bhd (KL:PBA) said on Wednesday that its wholly owned unit, Perbadanan Bekalan Air Pulau Pinang Sdn Bhd, has proposed the establishment of a RM5 billion sukuk wakalah programme to support its long-term financing needs.

The group said it has completed the lodgement of required documentation with the Securities Commission Malaysia (SC) to facilitate the sukuk issuance.

In filing with Bursa Malaysia, PBA said proceeds from the sukuk will be used for shariah-compliant purposes, including capital expenditure, working capital, investments, refinancing of existing and future shariah-compliant borrowings, as well as costs related to the issuance and programme establishment.

According to the company, the perpetual sukuk wakalah programme will allow Perbadanan Bekalan Air Pulau Pinang to issue Islamic debt securities from time to time, provided that the outstanding nominal value does not exceed RM5 billion at any one time.

Each tranche under the programme will carry a minimum tenure of one year, with the first issuance expected within 90 business days from the lodgement date.

"The sukuk wakalah programme has been assigned with a credit rating of AAA by RAM Rating Services Bhd," PBA said, adding that each issuance may be rated, unrated, or a combination of both, subject to market conditions and investor demand.

PBA also noted that the programme has been structured to accommodate issuance under various sustainable and responsible investment (SRI) frameworks, including domestic SRI-linked sukuk guidelines and international ESG-aligned bond standards.

Maybank Investment Bank Bhd and United Overseas Bank (Malaysia) Bhd are the joint principal advisers and joint lead arrangers for the programme, while Maybank Islamic Bhd is the appointed shariah adviser.

Shares in PBA closed one sen or 0.52% lower at RM1.93 on Wednesday, giving the group a market capitalisation of RM639.35 million. Year-to-date, the stock has declined 13%.