KUALA LUMPUR (July 8): VS Industry Bhd has proposed to establish an Islamic medium term notes programme of up to RM1 billion in nominal value to raise funds for working capital requirements, capital expenditure, investments and general corporate purposes.

In a filing with Bursa Malaysia, the integrated electronics manufacturing services (EMS) provider said its wholly-owned subsidiary VS Capital Management Sdn Bhd has made a lodgement with the Securities Commission Malaysia for the establishment of the programme based on the Shariah principle of Wakalah Bi Al-Istithmar.

VS Industry said the Sukuk Wakalah programme has been assigned a preliminary rating of AAIS by MARC Ratings Bhd, and HSBC Amanah Malaysia Bhd is the principal adviser, lead arranger, lead manager and Shariah adviser for the programme.

MARC said in a statement that the rating reflects the group’s credit strength and its well-established operating track record and strong market position in the EMS industry as well as its healthy balance sheet structure, characterised by low-to-moderate leverage and strong liquidity position.

Meanwhile, VS Industry said all utilisation of proceeds raised under the Sukuk Wakalah programme shall be Shariah compliant.

The group said its working capital requirements include the manufacturing, assembly and sale of electronic and electrical products and plastic moulded components and parts, while its capital expenditure requirements include the acquisition of land and building, and the purchase of plant and machinery.

It further explained that general corporate purposes include the repayment or refinancing of existing borrowings, provision of Islamic intercompany financing, and expenses relating to establishment of the Sukuk Wakalah programme.

VS Industry closed 0.5 sen or 0.5% lower at 96 sen, giving it a market capitalisation of RM3.69 billion.