TM to establish US$750m sukuk

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KUALA LUMPUR: Telekom Malaysia Bhd (TM) announced yesterday that it has received approval from the Securities Commission Malaysia (SC) to establish a multi-currency sukuk programme of up to US$750 million (RM2.71 billion) in nominal value.

In a filing with Bursa Malaysia, TM (fundamental: 1; valuation: 0.9) said the approval was secured by its wholly-owned subsidiary Tulip Maple Bhd.

It said the sukuk programme shall provide TM with the flexibility to manage its fundraising requirements and to have an alternative access to debt funding, in addition to conventional bank borrowings.

“The sukuk proceeds, which are subsequently received by TM, will be utilised for capital expenditure and business operating requirements or, as the case may be, as set forth in the pricing supplement for the relevant series, where such utilisation shall be syariah-compliant,” TM said. 

In a separate announcement on the same day, TM said it had acquired Tulip Maple for RM1 on Monday.

It said the acquisition is to facilitate the proposed issuance of offer for subscription or purchase of or invitation to subscribe to or purchase of sukuk, pursuant to the proposed multi-currency sukuk programme under the syariah principle of Wakala.

“The acquisition is not expected to have any material impact on the consolidated earnings of TM for the financial year ending Dec 31, 2015,” it added. 

TM edged up two sen or 0.28% to close at RM7.20 yesterday, giving it a market capitalisation of RM26.71 billion.

 

This article first appeared in The Edge Financial Daily, on March 4, 2015.