KUALA LUMPUR (March 22): Boustead Holdings Bhd is seeking time extension consent from holders of the diversified group’s RM2.5 billion Islamic bonds or sukuk to comply with the covenant of the securities.
The facility agent for the Sukuk Murabahah Programme (SMP), Affin Hwang Investment Bank Bhd, posted a request on behalf of Boustead to Bank Negara Malaysia’s (BNM) Fully Automated System for Issuing/Tendering (FAST) website today.
Boustead said the trustee for the sukuk last Friday sent the letters on Boustead’s request via email to the sukukholders. Boustead said it seeks time indulgence to comply with the information covenant.
A bond covenant is a legally binding agreement between a bond issuer and bondholder to safeguard both parties’ interests.
The agreement comprises covenants that require the bond issuer to meet certain requirements and covenants that disallow the issuer from doing certain things.
Boustead announced the 10-year sukuk programme — which combines an initial sukuk issuance of RM2 billion and a subsequent issuance worth RM500 million — in September 2017.
It said the proceeds to be raised from the sukuk programme may be utilised to finance future property development projects and capital expenditure (capex), investments in subsidiaries or associates as well as working capital requirements.
The proceeds will also go towards refinancing existing borrowings of the company, to fund the reserve account to meet the minimum required balance under the terms and conditions of the sukuk programmes, and pay the related fees and expenses.
The sukuk programme, which is an unrated sukuk programme, is implemented under the Securities Commission Malaysia’s (SC) Guidelines on Unlisted Capital Market Products under The Lodge and Launch Framework.
Boustead earlier on Jan 7 sought consent from its sukukholders for an extension of time to March 23 to deposit 50% of the FSRA Minimum Required Principal Balance into the Finance Service Reserve Account for its RM2 billion SMP.