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BUSINESS • 26/09/2024 06:45 PM

Johor Plantations Issues Its First Sukuk Wakalah Of RM1.35 Bln

KUALA LUMPUR, Sept 26 (Bernama) -- Johor Plantations Group Bhd has successfully issued its inaugural Sukuk Wakalah in aggregate of RM1.35 billion in nominal value from its Sukuk Wakalah Programme.

The group said the issuance will significantly reduce its annual interest expenses.

“The blended profit rate for the RM1.3 billion Islamic Medium-Term Notes (IMTN) issuance is set at 4.08 per cent compared to an average of 5.12 per cent on existing facilities.

“This translates to an approximate saving of RM12.8 million annually, improving the group’s cash flow and enhancing profitability,” Johor Plantations said in a statement.

The group said upon repayment of the Islamic Syndicated Term Financing of RM1.5 billion and the Islamic Term Financing of RM500 million, collateral valued at RM2.4 billion will be released.

This strategic decision will not only bolster Johor Plantation’s balance sheet but also increase flexibility in asset management.

“Additionally, by consolidating multiple loans into a single Sukuk facility, Johor Plantations simplifies its debt management and reduces administrative costs.

"This streamlined structure is expected to enhance operational efficiency and further strengthen the group’s financial position,” it said.

Managing director Mohd Faris Adli Shukery said the group is thrilled by the overwhelming support from investors, as evidenced by the issuance being oversubscribed by 3.27 times.

He said this robust demand highlights widespread confidence in the group’s long-term growth prospects.

“The favourable rates achieved during this Sukuk issuance reflect our AA1 credit rating and underscore investor trust in us as a leader in sustainability, as well as our strong operational and management performance,” he said.

Johor Plantations said the Sukuk features a one-way upward adjustment to its profit rates linked to its achievement of pre-determined sustainability performance targets.

The targets include 50 per cent carbon intensity reduction (Scope 1 and 2) against its 2012 baseline, 100 per cent traceability to fresh fruit bunches (FFB) suppliers by 2025 and annual water consumption of 1.2 cubic meters per metric tonne FFB and below.

Maybank Investment Bank acts as the sole principal adviser, sole sustainability structuring adviser, joint lead arranger and joint lead manager for the Sukuk Issuance.

-- BERNAMA

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