KUALA LUMPUR (Dec 4): EKVE Sdn Bhd (ESB), a wholly-owned subsidiary of Ahmad Zaki Resources Bhd (AZRB), has secured debt financing facilities for the East Klang Valley Expressway (EKVE) project.

In a filing with Bursa Malaysia, AZRB said ESB has entered into a government support loan agreement with the Malaysian government today, for a term loan facility of RM635 million.

ESB also entered into a guaranteed sukuk murabahah facility agreement with Bank Pembangunan Malaysia Bhd and Maybank Investment Bank Bhd (Maybank IB) for a guaranteed Islamic medium term notes (MTN) facility of up to RM1 billion.

AZRB said the MTN, under the shariah principle of murabahah via Tawarruq arrangement, is for the issuance of guaranteed Islamic MTN of up to RM1 billion in nominal value.

AZRB had earlier announced on Dec 18, 2013, that the sukuk murabahah facility will have a tenure of up 22 years from the date of issuance.

Furthermore, ESB has also entered into a BG-i/kafalah facility agreement between Bank Pembangunan, Maybank IB, Malaysian Trustees Bhd and Maybank Islamic Bhd for an Islamic financial guarantee facility of up to RM1 billion to guarantee the sukuk murabahah issuance.

“The facilities constitute part of the funding requirement of RM1.55 billion for the construction of the 39.5km EKVE under the build-operate-transfer (BOT) concept that was awarded to ESB,” the filing stated.

“The remaining balance will be funded via equity financing from AZRB,” it added.

AZRB inked the concession agreement with the government in February 2013 for the EKVE, the eastern and final uncompleted route of the Kuala Lumpur Outer Ring Road which would link the Kajang Silk Expressway and the Karak Expressway.

At the time, it was reported that the concession was for a period of 50 years, and would come with a loan from the government worth RM635 million, at an interest rate of 4% a year.

AZRB (fundamental: 0.6; valuation: 2.6) closed unchanged at 64 sen today, for a market capitalisation of RM308.52 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)