SMJ Sdn Bhd, a wholly-owned subsidiary of the State Government of Sabah through the Chief Minister Incorporated of Sabah, has successfully priced its inaugural RM900 million Islamic medium-term notes (Sukuk Wakalah) on 16 October 2023 issued out of its AAA-rated Multi-Currency Sukuk Wakalah Programme of up to RM10 billion in nominal value.
AmInvestment Bank Berhad is the sole Principal Adviser and Lead Arranger for the Sukuk Wakalah Programme (PA/LA).
The Sukuk Wakalah, which has a tenor of between 5 and 15 years, was issued under the Shariah principle of Wakalah and carries a profit rate of between 4.23% and 4.67% per annum. The inaugural issuance was closed with an order book of RM3.5 billion translating to a bid to cover ratio of 3.9 times, subscribed by a diverse group of investors in Malaysia. The overwhelming demand delivered an intraday price tightening of 20 basis points and reflects the market’s confidence in SMJSB’s financial strength, business prospects and corporate governance and the Sabah State Government’s strong support for the company.
The Joint Lead Managers for the inaugural Sukuk Wakalah issuance were AmInvestment Bank, CIMB Investment Bank Berhad, and Bank Pembangunan Malaysia Bhd (BPMB)
These cash flows will enable the State Government to diversify its funding sources, optimise the capital structure, and support a growth strategy where SMJSB will continue to acquire profitable and producing oil and gas asset
To-date, SMJSB has successfully acquired profitable and producing oil and gas businesses and assets to create a balanced portfolio as a financial investor including the 50% participating interest in Samarang Production Sharing Contract (PSC) with
PETRONAS Carigali Sdn Bhd as the operator and SAMUR the largest single-train ammonia and urea plant in Southeast Asia.
SMJSB will acquire Sabah International Petroleum Sdn Bhd (SIP), which holds a 10 per cent ownership stake in Petronas LNG9 Sdn Bhd that operates a LNG plant within the Bintulu LNG Complex and use the Sukuk proceeds to part refinance its
SIP’s existing borrowings.
