KOTA KINABALU – Sabah’s oil and gas firm SMJ Sdn Bhd has successfully issued its maiden Islamic medium-term notes of up to RM900 million in nominal value based on the Shariah principal Sukuk Wakalah.
It was issued from its AAA-rated multi-currency of up to RM10 billion or its equivalent in other currencies in nominal value, it said in a statement here today.
AmInvestment Bank Berhad is the sole principal adviser and lead arranger for the Sukuk Wakalah Programme (PA/LA).
The Sukuk Wakalah, which has a tenor of between five and 15 years, was issued under the Shariah principle of Wakalah and carries a profit rate of between 4.23% and 4.67% per annum.
The inaugural issuance was closed with an order book of RM3.5 billion, translating to a bid to cover ratio of 3.9 times, subscribed by a diverse group of investors in Malaysia.
“The overwhelming demand delivered an intraday price tightening of 20 basis points and reflects the market’s confidence in SMJSB’s financial strength, business prospects and corporate governance and the Sabah state government’s strong support for the company,” the company said in a statement.
The joint lead managers for the inaugural Sukuk Wakalah issuance were AmInvestment Bank, CIMB Investment Bank Bhd and Bank Pembangunan Malaysia Bhd (BPMB).
A signing ceremony of the maiden issuance was witnessed by Sabah Chief Minister Datuk Seri Hajiji Noor.
Also present were Sabah Finance Minister Datuk Seri Masidi Manjun, Sabah state secretary Datuk Safar Untong, Sabah government technical advisor cum SMJ Sdn Bhd special advisor Datuk Seri Lim Haw Kuang, AmInvestment Bank Berhad CEO Tracy Chen, and AmBank (M) Berhad’s Business Banking managing director Christopher Yap.
“These cash flows enable the state government to diversify its funding sources, optimise the capital structure and support our growth strategy where SMJSB will continue to acquire profitable and producing oil and gas assets,” said Masidi.
He further said that there are a lot more untapped oil and gas resources in Sabah.
Masidi also believed that the state government with SMJ Sdn Bhd will help the state achieve greater revenue sharing, greater say and greater participation in the oil and gas development in the state.
Dionysia said the Sukuk Wakalah is a recognition of SMJSB’s underlying financial strength and future growth.
This programme was launched in April this year and assigned a AAA-rating by RAM Rating Services Berhad (RAM), Malaysia’s largest credit rating agency.
“This success also demonstrates the strong interest and confidence in Sabah state and SMJSB in undertaking oil and gas activities for the best interest of the state,” she said.
SMJ Sdn Bhd currently holds 50% of participating interest in Samarang Production Sharing Contract with Petronas Carigali Sdn Bhd as the operator.
The company also holds up to 20% back-in option in Block SB409 PSC, 25% equity in the integrated ammonia and urea production complex in Sipitang Oil and Gas Industrial Park.
The state oil company is also expected to acquire Sabah International Petroleum Sdn Bhd, which holds 10% ownership in Petronas LNG9 Sdn Bhd. Petronas LNG9 operates a plant within the Bintulu LNG Complex.
SMJ is expected to use the proceeds from the Sukuk issuance to refinance part of Sabah International Petroleum loans. – The Vibes, October 20, 2023
