Avaland Bhd Launches RM1 Billion Sukuk for Future Developments

Leading property developer Avaland Bhd (formerly known as MCT Bhd) has announced the launch of an RM1 billion Islamic Medium-Term Notes Programme. This initiative, lodged with the Securities Commission Malaysia, is a strategic move aimed at funding the company’s future developments, land acquisitions, and capital expenditures.

Sukuk Programme Details

Avaland’s sukuk program is structured on the shariah principle of Murabahah via the Tawarruq arrangement. This allows the company to issue various types of sukuk, including Sustainable and Responsible Investment (SRI) sukuk, ASEAN sukuk, SRI-linked sukuk, and ASEAN sustainability-linked sukuk. These instruments are designed to attract a diverse range of investors who are keen on sustainable and responsible investments.

The program has been assigned a long-term credit rating of AA3 with a stable outlook by RAM Rating Services Bhd. This rating reflects the company’s robust earnings visibility, supported by unbilled sales of RM852 million as of March 31, 2024.

Strategic Partnerships and Financial Management

Alliance Islamic Bank Bhd and AmInvestment Bank Bhd have been appointed as the joint principal advisers, joint lead arrangers, and joint lead managers for this Sukuk program. These partnerships are crucial for ensuring the successful issuance and management of the Sukuk, providing Avaland with the financial expertise needed to navigate the complexities of the market.

CEO’s Vision and Sustainable Development Goals

Apollo Bello Tanco, CEO of Avaland, expressed his excitement about this new venture: “We are thrilled to be partnering with Alliance and AmInvestment Bank to establish our first Sukuk program. We believe that the proceeds raised will further fuel Avaland’s growth, following the positive response to all of our new launches in 2024.”

He added, “This program marks a significant phase in our sustainability journey. The synergy between our sustainability performance and financing metrics aligns with our efforts to become a leading sustainable property developer as part of our Sustainability Roadmap.”

Driving Growth and Sustainability

Avaland’s commitment to sustainable development is evident in this new initiative. The funds raised through the Sukuk program will be pivotal in advancing the company’s projects that adhere to high environmental and social governance (ESG) standards. This move is in line with global trends where investors are increasingly looking for opportunities that offer both financial returns and positive environmental impact.

The Future of Avaland

With the new Sukuk program, Avaland is well-positioned to enhance its market presence and continue its trajectory of growth and innovation. The company’s focus on sustainable development not only bolsters its reputation but also ensures long-term financial stability.

Avaland’s strategic use of the Sukuk program underscores its dedication to sustainable growth and responsible investment. This initiative is expected to set a benchmark in the property development sector, attracting a new wave of investors and setting the stage for future success.