PETALING JAYA: Johor Plantations Group Bhd (JPG) has issued its inaugural Sukuk Wakalah in aggregate of RM1.35bil in nominal value (Sukuk Issuance) from its Sukuk Wakalah Programmes.
JPG said the proceeds from the issuance will be used for Shariah-compliant purposes, including refinancing its existing and future Shariah-compliant borrowings, supporting working capital, investments and capital expenditure as well as covering fees and expenses related to establishing the Sukuk Wakalah Programmes.
JPG managing director Mohd Faris Adli Shukery said the issuance was oversubscribed by 3.27 times and the robust demand signals widespread confidence in the group’s long term growth prospects.
“The favourable rates achieved during this Sukuk issuance reflect our AA1 credit rating and underscore investor trust in JPG as a leader in sustainability, as well as our strong operational and management performance,” he said in a statement yesterday.
The group added that with the new Sukuk Issuance, there will be a significant reduction in its annual interest expenses.
The blended profit rate for the RM1.3bil Islamic Medium-Term Notes issuance is set at 4.08%, compared to an average of 5.12% on existing facilities. This translates to a saving of RM12.8mil annually, improving the group’s cash flow and enhancing profitability.
Moreover, JPG said upon repayment of the Islamic Syndicated Term Financing (STF-i) of RM1.5bil and the Islamic Term Financing (TF-i) of RM500mil, collateral valued at RM2.4bil will be released.
JPG is also able to simplify its debt management and reduce administrative costs by consolidating multiple loans into a single Sukuk facility. The group stated that this streamlined structure is expected to enhance operational efficiency and further strengthen its financial position.
Meanwhile, structured on the Shariah principle of Wakalah Bi Al-Istithmar, the issuance also marks the world’s first sustainability-linked Sukuk in the plantation sector, and also the first rated Sukuk under the sustainable and responsible investment (SRI) linked Sukuk guidelines by the Securities Commission in Malaysia.
JPG noted that the Sukuk features a one-way upward adjustment to its profit rates linked to the group’s achievement of pre-determined sustainability performance targets.
The targets include 50% carbon intensity reduction (Scope 1 and 2) against its 2012 baseline, 100% traceability to fresh fruit bunches (FFB) suppliers by 2025 and annual water consumption of 1.2 cubic meters per metric tonne FFB and below.
Maybank Investment Bank is the sole principal adviser, sole sustainability structuring adviser, joint lead arranger and joint lead manager for the Sukuk issuance.
