KUALA LUMPUR: Sime Darby Bhd has launched a cash offer to repurchase its unit Sime Darby Global Bhd’s outstanding sukuk totalling US$800mil (RM3.53bil) due next year and in 2023.
The conglomerate is also seeking consent to substitute Sime Darby Plantation Sdn Bhd as the obligor (the issuer contractually bound to make principal repayments and interest payments), seller and lessee for the two sukuk tranches of US$400mil each in place of Sime Darby Bhd.
In a filing with Bursa Malaysia, Sime Darby said the tender offers were in connection with the group’s recently-announced proposed internal reorganisation to create standalone listed entities in the plantation, property, and trading and logistics sectors on Bursa Malaysia’s Main Market.
The 2018 and 2023 sukuk tenders both expire at 5pm (Hong Kong time) on May 11. For the 2018 sukuk series, the company is offering a cash payment equal to 98% of the face amount of the sukuk. The company will also pay, on the settlement date (tentatively May 23), an accrued periodic distribution amounts payment in respect of those sukuk.
For the 2023 sukuk, Sime Darby plans to pay, on the settlement date, a cash purchase price equal to 97% of the face amount as well as an accrued periodic distribution amounts payment.
The 2018 and 2023 sukuk holders will receive an additional cash payment (sukuk early tender payment) equal to 3% of the face amount of the sukuk tendered before the early tender and early voting instruction deadline.
The proposals are conditional on holders representing at least 75% of the outstanding sukuk’s face amount passing the extraordinary resolutions.
The US$800mil tranches are part of the multi-currency sukuk programme of up to US$1.5bil (RM6.62bil) (or its equivalent in other currencies) set up by the Sime group on Jan 11, 2013.
In the same month, Sime Darby issued two tranches of US$400mil at five- and 10-year tenures due on Jan 29, 2018, and Jan 29, 2023, priced at yields of 2.053% and 3.290% per annum respectively.
The programme was accorded ratings of A by Fitch Ratings, A by Standard & Poor’s Ratings Services and A3 by Moody’s Investors Services Ltd. The net proceeds were to finance the group’s capital expenditure, working capital requirements and general corporate purposes.
Originally published on www.thestar.com.my