KUALA LUMPUR: Low-cost carrier AirAsia Bhd has proposed to set up a Sukuk Mudharabah programme to raise up to RM1bil.
It said on Thursday this is part of its funding plan and has mandated AmInvestment Bank Bhd to be the sole principal adviser, lead arranger, lead manager and facility agent.
Of the RM1bil, it plans to use RM550mil to part finance its capital expenditure and RM300mil to refinance its banking facility.
The Sukuk Mudharabah shall be recognised as equity capital from an accounting perspective.
AirAsia said the programme is perpetual in tenure, where AirAsia has a call option to redeem the Sukuk Mudharabah at the first call date, which is at end of the fifth, seventh or 10th year.
It added periodic distributions on the Sukuk Mudharabah can be deferred (in part or in full) at AirAsia’s option, where the deferred periodic distributions are cumulative and not compounding.
The Sukuk Mudharabah will be issued under the Shariah principle of Mudharabah. It added the Sukuk Mudharabah will not be rated.
“Payment obligations on the Sukuk Mudharabah will at all times, rank ahead of other share capital instruments or security for the time being outstanding, but junior to the claims of all other present and future creditors of AirAsia (other than obligations ranking pari passu with the Sukuk Mudharabah),” it said.