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Sunday, 27 December 2015

Malaysia: Samalaju Port’s $219m sukuk; Sasbadi’s $7.34m in private placement

Port operator Samalaju Industrial Port looks to raise $219.5 million through bonds while Sasbadi raises funds through private placement, in Malaysian corporate fundraising news over the week leading up to Christmas.

Samalaju Industrial Port seeks $219.5m funds via Islamic bond issuance

Samalaju Industrial Port Sdn Bhd is looking to raise up to MYR950 million ($219.5 million) via sukuk issuance to finance the construction of its 156 ha deep-sea Samalaju Port in Sarawak.
RAM Ratings said, Samalaju will be the operator of the MYR1.9 billion Samalaju Port upon its expected completion by the fourth quarter of financial year 2016, under a 40-year contract.
The construction of the port will also be financed with a government grant of MYR500 million, and an equity injection from Samalaju’s parent company Bintulu Port Holdings Bhd of MYR600 million.
The ratings agency has assigned an AA1(s)/stable rating to Samalaju’s proposed Sukuk Murabahah programme.
“In view of Bintulu Port’s solid relationship with the Malaysian government — given the latter’s shareholdings in Bintulu Port through various government agencies, the Sarawak government and Petronas (Petroliam Nasional Bhd) — the state is seen as having an incentive to provide the company with financial assistance, which includes subscribing to a portion of the proposed sukuk, if necessary,” the statement said.

Sasbadi to raise $7.34m through private placement

Sasbadi Holdings Bhd has proposed to undertake a private placement to raise up to MYR31.75 million ($7.34 million), to part finance future acquisition of publishing, education, education-related business(es) or intellectual property rights, to repay bank borrowings and for working capital.
Based on an indicative issue price of MYR2.50 per placement share, Sasbadi said, in a Bursa Malaysia filing, the proposed private placement will involve the issuance of up to 12.7 million new shares or 10 per cent of the issued share capital of Sasbadi. The issue price will be determined and announced later.
The education book publisher Sasbadi said the placement shares shall be priced at not more than 10 per cent to the five-day volume weighted average market price of Sasbadi, but not lower than the par value of Sasbadi shares of MYR0.50 each.
“The board of directors is of the view that the proposed private placement is the most appropriate avenue of fund raising as it enables Sasbadi to raise funds to partly pare down its borrowings, which would give rise to interest savings of MYR500,000 per year,” the group said in the announcement.
It also noted that it would be able to raise additional funds without incurring interest expenses or service principal repayments compared with conventional bank borrowings or the issuance of debt securities.
“This would allow Sasbadi to preserve cash flow for reinvestment and/or operational purposes,” it added.
The group is also proposing a share split involving the subdivision of every one existing share of 50 sen each in Sasbadi into two shares of 25 sen each on an entitlement date to be determined and announced later, to enhance the stock’s marketability and trading liquidity.
(Deal Street Asia / 25 December 2015)
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Demand for Islamic finance gaining ground in Mideast

Islamic finance is gaining popularity in key markets, including the personal loan sector, and there has been a marked increase in the amount of UAE residents choosing an Islamic finance loan over a conventional loan
Compareit4me group has noticed an increase of 53 per cent of consumers searching for Islamic finance products.
The increase in popularity is across the board and research by Morgan McKinley found a surge in the global value of Islamic banking assets is forecasted for the next few years. Figures are predicted to reach $6.5 trillion by 2020, a huge leap compared to of $150 billion in the mid-1990s.
In the UAE alone, total Islamic banking assets accrued in 2013 was $95 billion (compared to $83 billion in 2012), and it is showing no signs of slowing down, with the Dubai Chamber of Commerce and Industry predicting that the annual growth rate will reach 17 per cent until 2018.
The increase has been with all consumers, with a recent study from Bloomberg concluding that in the UAE, Islamic finance has also gained popularity among non-Muslim expats.
The sector is still growing at an incredible rate; in some markets it is growing up to 50 per cent faster than traditional banking and it looks to be a trend that's set to continue. This is predominantly thanks to an impressive increase in competition, product development and better customer value.
For a while Islamic banks slipped behind conventional banking in terms of educating customers about what they offer, how they are different and why they are an appealing alternative - but they have stepped up. Now the awareness is much greater, the products available are much wider and these efforts are paying off, as the spikes on, a Middle East finance comparison website, indicate.
While UAE Islamic banks including ADIB, Emirates Islamic, Dubai Islamic and ADNIF are continuing to offer competitive products, with flat rates on loans as low as 2.36 per cent, non-Islamic banks are also increasingly offering attractive Shariah-compliant products. Commercial Bank of Dubai and Noor are offering flat rates as low as 2.75 per cent, in comparison to other banks that are offering up to seven percent.
The research by found that 74 per cent of consumers are looking for personal loans and credit cards; nine per cent for home loans; five per cent for auto loans; and 12 per cent for other products, such as different types of bank accounts and business loans.
Jon Richards, chief executive officer of, said: "Once they might not have been, but now Islamic finance products are most definitely viewed side by side with conventional bank products. Given the trends we've seen on the site, we've become aware that most users are blind to the fact a certain product is Islamic, they just simply want a good rate. Therefore, the main attraction for customers seeking new banking products is the transparent fees and rates which come with the Shariah offerings."
(Khaleej Times / 25 December 2015)
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