1. Introduction

On behalf of the Board of Directors of Sarawak Oil Palms Berhad (“SOPB”), SOPB wishes to announce that SOP Capital Sdn. Bhd. (the “Issuer”), a wholly-owned subsidiary of SOPB and its special purpose funding vehicle, has received the acknowledgement receipt from the Securities Commission of Malaysia (the “SC”) on 21 August 2020 pursuant to OCBC Al-Amin Bank Berhad’s lodgement (on behalf of the Issuer) of the Sukuk Murabahah Programme pursuant to the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework issued by the SC on 9 March 2015 (as amended from time to time) (“LOLA Guidelines”).

2. Details of the Sukuk Murabahah Programme

2.1 Tenure

The tenure of the Sukuk Murabahah Programme is up to 20 years from the first issue date of the Sukuk Murabahah. 

Each issue of the Sukuk Murabahah shall have a tenure to be agreed upon between the Issuer and the Lead Arranger / Principal Adviser prior to its issue date, provided always that the date of maturity of the Sukuk Murabahah shall not extend beyond the tenure of the Sukuk Murabahah Programme.

2.2 Security

The Sukuk Murabahah Programme will be secured by, inter alia, land charges created by each of SOP Plantations (Borneo) Sdn. Bhd., SOP Plantations (Suai) Sdn. Bhd. and SOP Plantations (Sabaju) Sdn. Bhd., and an assignment and charge over the finance service reserve account created by the Issuer.

2.3 Utilisation of Proceeds 

The proceeds to be raised from the issuance of the Sukuk Murabahah shall be utilised by SOPB and/or its subsidiaries (the “Group”) for the following Shariah-compliant purposes: 

(i) to part-finance and/or part-reimburse the cost and expenses in relation to plantation development, cultivation, replanting, mechanization, plant or building expansion, upgrading, equipment replacement and any other activities in relation to the Group’s upstream and downstream businesses;

(ii) to part-finance and/or part-reimburse the acquisition costs or purchase consideration of oil palm/oil palm related investments of the Group; 

(iii) for working capital requirements of the Group;

(iv) for general corporate purposes (including repayment/payment of inter-company advances and shareholder advances) of the Group;

(v) to refinance existing financing or borrowings of the Group; and

(vi) to refinance any maturing Sukuk Murabahah issued under the Sukuk Murabahah Programme. 

2.4 Salient terms and conditions of the Sukuk Murabahah Programme

(i) Periodic Profit Payments

The Sukuk Murabahah may be issued with or without periodic profit payments (“Periodic Profit Rate”). In the case of Sukuk Murabahah issued with Periodic Profit Payments, the periodic profit rate will be determined prior to the issuance of the Sukuk Murabahah, based on either a fixed or floating rate.

(ii) Status

All payment obligations under the Sukuk Murabahah shall represent direct, unconditional and secured obligations of the Issuer. The Sukuk Murabahah shall at all times rank pari passu, without any discrimination, preference or priority amongst themselves and rank at least pari passu in all respects with all other present and future unsecured and unsubordinated obligations of the Issuer, subject to those preferred by law or permitted under the transaction documents in respect of the Sukuk Murabahah Programme.

(iii) Listing Status

The Sukuk Murabahah will not be listed on Bursa Malaysia Securities Berhad or any other stock exchanges.

(iv) Issue Price

The Sukuk Murabahah may be issued at par, at a discount or at a premium (the “Issue Price”). The Issue Price of the Sukuk Murabahah shall be determined prior to each issuance. 

(v) Yield to Maturity

The yield to maturity shall be determined prior to each issuance of the Sukuk Murabahah.

(vi) Redemption at Maturity

Unless previously redeemed or purchased and cancelled, the Sukuk Murabahah will be redeemed by the Issuer at 100% of their nominal value on their respective maturity dates.

(vii) Governing Law

Laws of Malaysia.

OCBC Al-Amin Bank Berhad is the Principal Adviser, Lead Arranger, Lead Manager and Shariah Adviser for the Sukuk Murabahah Programme.

This announcement is dated 24 August 2020.