Sin Heng Chan (Malaya) Berhad’s Successful Acquisition Funding: Maiden Issuance under its RM60.0 million Sukuk Wakalah Programme

Sin Heng Chan (Malaya) Berhad (“SHC”) has successfully made its inaugural issuance of Islamic Medium Term Notes (“IMTN”) of RM60.0 million (“Sukuk Wakalah”) on 20 May 2021, under its recently launched maiden IMTN programme of RM60.0 million in nominal value.

Kenanga Investment Bank Berhad acted as the Joint Lead Manager and was instrumental in the success of the transaction which was participated by 13 investors via a combination of book-building and private placement process. The issuance of the Sukuk Murabahah took place on 24 March 2021 and was oversubscribed by 1.22 times.

The Sukuk Wakalah is non- rated and comprises eight (8), nine (9) and ten (10) year tenures. The distribution of the Sukuk Wakalah was completed on a private placement basis.

Proceeds from the issuance will be utilised to finance the cash consideration portion for SHC’s acquisition of a concession company (“Target Co”). The Target Co indirectly holds a 40% stake in a 17-year asset management concession at the Pagoh Education Hub in Johor, and is expected to further contribute a stable income stream to SHC Group during the concession period. The Sukuk Wakalah is secured by the shares pledged and the assignment of dividends from the acquired Target Co.

The IMTN programme also incorporates an option for upsize in the future, whereby additional proceeds can be raised by SHC Group for other Shariah-compliant purposes, such as, financing for investment activities, capital expenditure, working capital, refinancing and other general corporate purposes.

Kenanga Investment Bank Berhad (“KIBB”) held an instrumental role in overseeing the deal execution efficiently while forging a stronger clientele relationship, as this is the 2nd issuance KIBB has successfully completed under the SHC Group of companies.