6 August, 2011
Malaysia Airports Holding Bhd (MAHB) has proposed to undertake a sukuk programmes up to RM3.1 billion to part finance the construction of its new terminal (klia2) and to refinance its existing borrowings which were used for Shariah-compliant purposes as well as for MAHB’s Shariah-compliant general corporate purposes.
“The development of the new klia2 is expected to cater for the operational and service needs of the fast growing low-cost carrier airlines in the country and is expected to contribute positively to the future earnings of the MAHB group,” it said.
It said KLIA-2 is expected to be completed by the end of the first quarter of 2012.
CIMB Investment Bank Bhd and Citibank Bhd have been appointed as the joint principal advisers, joint lead arrangers and joint lead managers for the proposed sukuk programmes which combined Islamic commercial paper (ICP) programme and Islamic medium term note (IMTN) programme, with a sub-limit of RM1 billion nominal value for the ICP programme.
MAHB said the proposed sukuk programmes are expected to be implemented by the third quarter of this year and it would announce the detailed utilisation of the proceeds where required.
MAHB said the impact of the proposed sukuk programmes on the earnings of the MAHB group will depend on among others, the coupon or profit rate of the Sukuk.
The company said the ICP and the IMTN have been accorded a preliminary short-term rating of P1 and a preliminary long-term rating of AAA with stable outlook,respectively by RAM Rating Services Bhd.
The company added the proposed programmes, when issued, would increase the gearing of the MAHB group unless and to such extent where the proceeds from such issuances are used to refinance existing borrowings/financings.
The proposal is done through its wholly-owned subsidiary, Malaysia Airports Capital Bhd (MACB), a special-purpose vehicle set up as a wholly owned subsidiary of MAHB. MACB’s income will be solely derived from the ijarah rental payable by MAHB, which will be used to service the issuer’s debt obligations.
MAHB, 60% owned by state-owned investment firm Khazanah Nasional Bhd, is the exclusive 25-year concession holder that operates, manages and maintains Kuala Lumpur International Airport (KLIA).
The group also holds a separate 25-year concession to operate, manage and maintain all other Malaysian airports and short-take-off and landing ports with the exception of Senai International Airport in Johor.
(This story, written by Dalila Abu Bakar, appeared in The Malaysian Reserve on August 6, 2010. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)