KUALA LUMPUR (April 20): MISC Bhd said it has entered into a US$527 million (RM2.3 billion) syndicated loan facility to finance six very large ethane carriers (VLECs).  

The 11-year sustainable-linked non-recourse term loan is the group’s debut sustainability-linked loan (SLL) and is structured to align with its long-term business strategy and sustainability aspirations. This is a testament to the group’s commitment towards promoting sustainable development, as well as a recognition of its contribution to environmental, social and governance (ESG), according to a statement on Thursday (April 20).

“MISC has committed to achieving net-zero greenhouse gas emissions by 2050 and aims to contribute to a carbon-neutral economy by transitioning to low-carbon, and eventually zero-carbon, emissions transport solutions,” said the group, which builds oil and gas support structures.

MISC via its Singapore-based subsidiaries - Seri Everest (Singapore) Pte Ltd, Seri Erlang (Singapore) Pte Ltd, Seri Emei (Singapore) Pte Ltd, Seri Emory (Singapore) Pte Ltd, Seri Elbert (Singapore) Pte Ltd, and Seri Emperor (Singapore) Pte Ltd - inked the syndicated loan facility with Standard Chartered, which is the structuring bank, sustainability and hedge coordinators for the facility.

Meanwhile, Korea Development Bank, Sumitomo Mitsui Banking Corporation, Labuan Branch, DBS Bank Ltd, Export-Import Bank of Malaysia Bhd, MUFG Bank Ltd, Singapore Branch, as well as an undisclosed lender acted as mandated lead arrangers.

“With both environmental and governance key performance indicators (KPIs), the ambitious environmental KPI is benchmarked to go beyond the emissions target outlined in International Maritime Organisation’s (IMO) 2050 decarbonisation trajectory and the Poseidon Principles. This includes measuring the carbon intensity of MISC’s Gas Assets & Solutions fleet by means of the annual efficiency ratio,” said MISC.

The group will also benefit from the annual adjustments of the interest rate benchmarked by meeting the pre-agreed KPIs, noted MISC.

MISC vice-president of finance Raja Azlan Shah Raja Azwa commented: “We at MISC believe that integrating ESG principles into our long-term strategy and decision-making is key to shaping a sustainable future. Securing this landmark SLL for our VLECs reflects our continued commitment to accelerating the drive to improve our ESG performance by tying our financing with our decarbonisation strategy.

“We will progressively implement our plan to achieve net-zero GHG (greenhouse gas) emissions by 2050 and this includes fostering strategic collaborations with our stakeholders including the ship financing sector,” Raja Azlan added.

At Thursday’s noon break, MISC closed five sen or 0.69% higher at RM7.30, giving it a market value of RM32.59 billion.