‘Sukuk set to improve UMW’s balance sheet’

KUALA LUMPUR: UMW Holdings Bhd said its proposed RM2 billion perpetual sukuk should improve its borrowing structure by enabling it to access the capital markets for longer-tenure funding.

The issuance has been assigned a preliminary rating of “A1” by RAM Rating Services Bhd.

UMW said it had received the acknowledgement receipt from the Securities Commission over the sukuk.

“The nature of the perpetual sukuk allows it to be treated as part equity from a rating perspective and as 100 per cent equity from an accounting perspective, thereby strengthening UMW’s balance sheet,” said UMW in a statement yesterday.

The proceeds would be used to refinance its debt obligations as well as to finance working capital requirements, investments and capital expenditure of its general corporate purposes.

Earlier this month, UMW offered nearly RM1 billion to buy substantial stakes in Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and automotive group MBM Resources Bhd.

It offered to buy a 10 per cent stake in Perodua from Permodalan Nasional Bhd (PNB) for RM417.5 million.

The cash-and-new shares deal valued Perodua at RM4.17 billion.

The group will pay RM117.5 million cash and the balance via the issuance of 49.26 million new UMW shares at RM6.09 each for the Perodua stake held by PNB.

UMW currently holds a 38 per cent stake in Perodua, while MBM Resources owns 22.58 per cent stake in the car maker.