This article first appeared in The Edge Financial Daily on October 2, 2018

KUALA LUMPUR: Telekom Malaysia Bhd (TM) is seeking to raise up to RM4 billion through establishing sukuk wakalah programmes to fund its capital expenditure (capex) and business operating requirements.

In a Bursa Malaysia filing yesterday, TM said it had lodged the proposal with the Securities Commission Malaysia last Friday.

The sukuk wakalah would comprise Islamic commercial papers (ICPs) and Islamic medium term notes (IMTN) programmes, said the telecommunications company.

“The ICP and IMTN programmes, with respective tenures of seven and 30 years from the date of first issuance, have been assigned a short-term rating of P1 and a long-term rating of AAA respectively by RAM Rating Services Bhd,” said TM.

Each ICP’s tenure, to be agreed upon later, may differ — but with a limit of 12 months. Each IMTN shall have a tenure of between a year and 30 years, TM added.

“To avoid doubt, TM can on-lend the proceeds of the sukuk wakalah to its subsidiaries via syariah-compliant facilities for the aforementioned purposes, which shall be syariah-compliant,” it said.

AmInvestment Bank Bhd and Maybank Investment Bank Bhd are the joint principal advisers, joint lead arrangers and joint lead managers for the programmes, while AmBank Islamic Bhd and Maybank Islamic Bhd are the joint syariah advisers, it added.

TM shares slid five sen or 1.55% at RM3.17, with a market capitalisation of RM11.91 billion.