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Sime Darby Berhad to restructure US$800 million sukuk
Malaysia’s diversified conglomerate Sime Darby Berhad on May 16 announced that it has received bondholders’ approval to restructure its US$800 million sukuk, a major milestone in the group’s proposed debt reorganization, which forms part of its plan to create three independent listed companies.
The Asset 16 May 2017

Malaysia’s diversified conglomerate Sime Darby Berhad on May 16 announced that it has received bondholders’ approval to restructure its US$800 million sukuk, a major milestone in the group’s proposed debt reorganization, which forms part of its plan to create three independent listed companies.

Holders of the sukuk, of which US$400 million mature in 2018 and the other US$400 million in 2023, approved the company’s plan to buy back the papers or replace the obligor or borrower, to Sime Darby Plantation from Sime Darby Berhad.

“This is an important step for the group in our proposed reorganization exercise to unlock value for shareholders,” says Sime Darby Berhad president and group CEO Tan Sri Dato’ Seri Mohd Bakke Salleh. “We must ensure that each listed company has the optimal capital structure which will allow it to pursue growth with focus and agility.”

The broader reorganization of the group involves the proposed listing of Sime Darby Plantation and Sime Darby Property through share distributions. Sime Darby Berhad will remain listed, owning the automotive, industrial equipment and logistics businesses.

On April 18 2017, Sime Darby Berhad launched a debt restructuring exercise to restructure its US dollar-denominated sukuk. Under the exercise, the sukuk holders can cash in on their investment in the sukuk or agree to change certain terms and conditions and replace Sime Darby Berhad with Sime Darby Plantation as the new borrower or obligor.

Sime Darby Berhad achieved a final tender and consent participation of 91% across both series of sukuk. In addition, investors holding almost a quarter of the 2023 sukuk chose to remain invested in Sime Darby Plantation.

Sime Darby Plantation achieved first-time corporate ratings of Baa1 by Moody’s Investors Service and BBB+ by Fitch Ratings, both on stable outlook. The ratings are similar to Sime Darby Berhad’s existing corporate ratings and reflect Sime Darby Plantation’s position as one of the world’s leading palm oil plantation players, its size and scale of business, track record, and strong shareholders’ support.

HSBC acted as the sole structuring and dealer manager for the exercise.

Photo courtesy of Sime Darby.

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