This article first appeared in The Edge Financial Daily on December 7, 2017

KUALA LUMPUR: Ranhill Holdings Bhd’s wholly-owned subsidiary, SAJ Capital Sdn Bhd, has applied to issue sukuk with up to RM650 million in nominal value, which Ranhill will be guaranteeing.

SAJ Capital yesterday made a lodgement with the Securities Commission Malaysia for the issuance of the sukuk, which will have a tenure of up to 12 years, Ranhill said in a filing with Bursa Malaysia.

The proceeds from the sukuk will be used by the issuer partly to finance the redemption of Ranhill Captial Sdn Bhd’s outstanding RM800 million Islamic medium-term notes. Ranhill Capital is another wholly-owned subsidiary of Ranhill.

It will also be used for the general corporate purposes of Ranhill and its group of companies, which include capital expenditure, working expenditure, and general funding requirements.

Additionally, the proceeds will go towards financing additional payments arising from the redemption of existing securities, financing the service reserve account, and paying fees and expenses related to the sukuk.

The Malaysian Rating Corp Bhd has assigned a preliminary AA-IS rating to the issuance with a stable outlook, Ranhill said.

Ranhill has appointed CIMB Investment Bank Bhd as the principal adviser and lead arranger for the sukuk, while both CIMB and MIDF Amanah Investment Bank Bhd are joint lead managers.

ZJ Advisory Sdn Bhd has been appointed the financial adviser.

Shares in Ranhill closed up 0.5 sen or 0.69% at 73.5 sen yesterday, giving the group a market capitalisation of RM652.91 million.