KUALA LUMPUR (Oct 28): Axiata Group Bhd’s 66.43%-owned subsidiary PT XL Axiata TBK plans to set up a 5 trillion rupiah (about RM1.57 billion) sukuk programme to support its business activity there.

Tranche I Sukuk amounting up to IDR1.5 trillion will have four series, with maturity from 370 days to seven years.

"The Tranche I Sukuk to be issued under the sukuk programme will be listed on the Indonesia Stock Exchange (IDX)," said Axiata in a filing with Bursa Malaysia today.

"The sukuk programme is a capital management initiative by XL to optimise its balance sheet and improve its capital efficiency, while raising its profile in the international and Islamic debt capital markets," said Axiata.

"The sukuk programme will provide XL [with] an avenue to diversify its funding sources and allow XL access to a greater diversity of investors, both onshore and offshore," it added.
 
Axiata said the net proceeds from the issuance of Tranche I Sukuk are expected to be utilised for XL’s working capital to support XL’s business activity, in terms of 2G radio frequency fee payment to the government for the period of December 2015 to 2016.

XL had on Oct 27, obtained a pre-effective statement from Indonesia's Financial Services Authority for the commencement of bookbuilding of the Tranche I Sukuk. The cellular provider had also signed an agreement with IDX for the primary listing of the Tranche I Sukuk.

Axiata's shares closed 12 sen or 1.91% at RM6.15 today, for a market capitalisation of RM53.55 billion.

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