1. INTRODUCTION

The Board of Directors of Leong Hup International Berhad (“LHI”) is pleased to announce the lodgement of an unrated Islamic medium term notes programme of up to RM1 billion in nominal value under the Shariah principle of Mudharabah (“Sukuk Mudharabah Programme”) by Leong Hup Capital Sdn Bnd (formerly known as Bridgespace Sdn Bhd) (“LHC”) on 23 November 2020 with the Securities Commission Malaysia (“SC”) under the SC’s Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework issued on 9 March 2015 and revised on 12 November 2020 (as amended from time to time). LHC is a wholly-owned subsidiary of Leong Hup Agrobusiness Sdn Bhd which in turn is an indirect subsidiary of Leong Hup (Malaysia) Sdn Bhd (“LHM”) and LHI.

2. DETAILS OF THE SUKUK MUDHARABAH PROGRAMME

The Sukuk Mudharabah Programme is established by LHC as a funding vehicle for LHM and the subsidiary companies of LHM (collectively, “LHM Group”) and is guaranteed by LHM pursuant to an irrevocable and unconditional corporate guarantee under the principle of Kafalah and an irrevocable and unconditional letter of undertaking both in favour of the sukuk trustee.

The Sukuk Mudharabah Programme is unrated and shall have a tenure of 10 years from the date of first issuance of the Islamic medium term notes (“Sukuk Mudharabah”) under the Sukuk Mudharabah Programme. The Sukuk Mudharabah to be issued under the Sukuk Mudharabah Programme from time to time shall have a tenure of at least 1 year and up to 10 years from the date of issuance as LHC may select provided that the Sukuk Mudharabah shall mature on or prior to the expiry of the Sukuk Mudharabah Programme.  

The first issuance of the Sukuk Mudharabah shall be made within sixty (60) business days or such other timeframe as may be imposed by the SC from the date of the lodgement with the SC.

The Sukuk Mudharabah may be issued via bought deal, private / direct placement or bookrunning on a best effort basis, as LHC may select to qualified investors under the selling restrictions as further detailed in the principal terms and conditions of the Sukuk Mudharabah Programme.

The proceeds from the Sukuk Mudharabah Programme shall be utilised by LHC for the following Shariah-compliant purposes:

(i) provide Shariah-compliant intercompany advance(s) to the companies within the LHM Group;

(ii) finance the redemption of any Sukuk Mudharabah then maturing; and

(iii) defray fees and expenses incurred in relation to the Sukuk Mudharabah Programme.

The proceeds from the Sukuk Mudharabah Programme shall be utilised by the relevant company within the LHM Group for the following Shariah-compliant purposes:

(i) refinance its existing financing/ borrowings;

(ii) finance its capital expenditure requirements;

(iii) finance its working capital requirements;

(iv) finance its investment and/or acquisition of company(ies) and/or business(es); and

(v) finance its general corporate purposes.

3. RATIONALE FOR THE SUKUK MUDHARABAH PROGRAMME

The Sukuk Mudharabah Programme shall provide LHM and the LHM Group with the flexibility to manage its fund-raising exercise and to have an alternative access to financing in addition to conventional bank financing.

4. ADVISERS

AmInvestment Bank Berhad is the Principal Adviser, Lead Arranger and Lead Manager for the Sukuk Mudharabah Programme while AmBank Islamic Berhad is the Shariah Adviser for the Sukuk Mudharabah Programme.

This announcement is dated 23 November 2020.