Boustead to Issue up to RM1.2b Hybrid Equity
KUALA LUMPUR, December 18, 2013 – – Boustead Holdings Berhad (Boustead) today announced the formal establishment of a Junior Islamic Medium Term Note Programme of up to RM1.2 billion in nominal value (Junior Sukuk Programme), after obtaining the approval from the Securities Commission Malaysia (SC) on 15 November 2013.
The Junior Sukuk Programme entails the issuance of hybrid equity in the form of Perpetual Junior Sukuk, which proceeds shall be utilised for the following purposes:
(i) finance capital expenditure, working capital requirements, corporate exercises, repayment of intercompany borrowings and general investments of BHB and/or any of its subsidiaries; and
(ii) refinance existing borrowings of BHB and/or any of its subsidiaries.
During the signing ceremony to formalise the Junior Sukuk Programme, YBhg Tan Sri Dato' Seri Lodin Wok Kamaruddin, Deputy Chairman/Group Managing Director, Boustead Holdings Berhad, said, “The Boustead Group is constantly on the lookout for growth opportunities. The Junior Sukuk Programme is timely since it allows the Group to raise the required funds as and when the appropriate opportunities present themselves.”
Mr Daniel Ebinesan, Group Finance Director, Boustead Holdings Berhad, added, “The Perpetual Junior Sukuk which also incorporates the characteristics of equity shall be recognised as part of Boustead’s shareholders’ funds. As such, this exercise would allow us to raise funds without impacting our gearing level. The first tranche under the Junior Sukuk Programme shall involve the issuance of RM683.0 million Perpetual Junior Sukuk by the end of the year.”
The first tranche shall be subscribed by a few institutional investors. AFFIN Investment Bank Berhad is the Principal Adviser, Lead Arranger and Lead Manager for the Junior Sukuk Programme. United Overseas Bank (Malaysia) Berhad is a Joint Lead Manager for the issuance.
Out of the total issuance proceeds, RM650.0 million would be utilised for the privatisation of Al-Hadharah Boustead REIT (Boustead REIT). The unitholders and shareholders of Boustead REIT and Boustead respectively had on 5 December 2013, approved the privatisation of Boustead REIT which would be undertaken by Boustead Plantations Berhad (BPB), a wholly-owned subsidiary of Boustead.
“The privatisation of Boustead REIT is part of the Boustead Group’s plan to consolidate and further unlock the value of its plantations businesses. The consolidation of our plantation assets under BPB is to achieve economies of scale and business synergies in its operations. Subsequently, we are looking to further unlock the value of our plantation business via the planned listing of the enlarged BPB in 2014,” said YBhg Tan Sri Dato' Seri Lodin.
Mr Daniel Ebinesan concluded, “Further Perpetual Junior Sukuk can be issued under the Junior Sukuk Programme. Coupled with the proceeds from the proposed IPO of BPB, the Junior Sukuk Programme would lead to the improvement of the Group’s gearing level.”
Since its inception as a modest trading entity more than 180 years ago, the Boustead Group has grown by leaps and bounds to comprise more than 90 subsidiary and associate companies, and has substantial interests in various sectors of the Malaysian economy. The Boustead Group's operations are focused in six key areas; plantation, heavy industries, property, finance & investment, trading & industrial and pharmaceutical. As at 30 September 2013, Boustead Holdings Berhad’s paid-up capital was RM517.1 million while its shareholders’ funds stood at RM4.7 billion. Its current market capitalisation is approximately RM5.6 billion.
Forward looking statements
This release may contain certain forward-looking statements with respect to the financial conditions, results of operations and business of the Group and certain plans and objectives of Boustead Holdings Berhad with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.
on behalf of: Boustead Plantations Berhad
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