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Hap Seng Management issues its inaugural Sustainability-linked Bonds

20/01/2022 10:34 AM

KUALA LUMPUR, Jan 20 -- Hap Seng Management Sdn Bhd, a wholly-owned subsidiary of Hap Seng Consolidated Bhd, has issued the first tranche of Sustainability-Linked Bonds (SLB) under its Unrated Bonds programmes of up to RM5 billion in nominal value.

In a statement today, Hap Seng said the issuance took place last month with OCBC Bank (Malaysia) Bhd acting as Sole Lead Manager for the SLB issuance.

Hap Seng said it has adopted a multi-faceted approach towards sustainability by aligning itself with nine of the 17 United Nations Sustainable Development Goals (SDGs), with the aim of safeguarding the well-being of employees and their workplace, limiting the impact of its business operations on the environment, and alleviating the economic and social disparities in Malaysia.

"The issuance of the SLBs marks a major milestone in Hap Seng’s sustainability journey, which began in 2014 when the company’s listed subsidiary, Hap Seng Plantations Holdings Bhd, issued its first sustainability report, followed by Hap Seng’s own sustainability statement in 2016," it said.

The SLBs were structured in accordance with the International Capital Market Association’s Sustainability-Linked Bond Principles and featured a variable interest rate adjustment mechanism based on the achievement of predetermined Sustainability Performance Targets (SPTs). 

The SPTs selected are intended to incentivise the reduction of water and electricity consumption, as well as to encourage the use of solar energy and recycling of rainwater.

Commenting on the issuance of the SLB, Hap Seng group managing director Datuk Edward Lee Ming Foo said sustainable financing is an important tool to bridge the commercial interests of shareholders with the holistic goal of environmental preservation.

"We are immensely proud of our inaugural sustainability-linked bonds issuance which reinforces our commitment to environmental sustainability.

"We intend to do our part as a corporate by contributing towards the preservation of natural resources and the mitigation of the adverse impacts of climate change through the adoption of best practices in our operations,” he said.

Meanwhile, OCBC Bank managing director, senior banker and head of investment banking Tan Ai Chin said Hap Seng’s inaugural foray into ESG-compliant financing is a reflection of its firm commitment towards a sustainable future, evidencing the encouraging trend of sustainable finance adoption among Malaysian public-listed companies. 

"OCBC Bank has been a prime mover of this targeted initiative, having entered into a Memorandum of Understanding with Bursa Malaysia last month to establish #financing4ESG as part of our continued contribution to further the sustainability agenda among Malaysian corporates and government-linked companies. 

"We view the increasing implementation of sustainable finance as an overwhelmingly positive sign that the corporate sector is aligned to our government’s commitment towards achieving carbon neutrality by 2050," she added.



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