First ringgit-denominated sukuk for water infrastructure funding
KUALA LUMPUR: Chinaowned water treatment company, BEWG (M) Sdn Bhd (BEWG) made its debut in the Malaysian sukuk market by successfully issuing RM400 million Islamic Medium Term Notes (Sukuk Wakalah) on July 19, 2017 - the first-ever ringgit denominated Sukuk by a Chinese conglomerate.
The Sukuk Wakalah was fully subscribed at the point of launch which allowed BEWG to achieve its target funding size and meet its financing objectives. The Sukuk Wakalah carries a rating of AAIS (stable) by Malaysian Rating Corporation Berhad.
Proceeds from this issuance will be used to partly finance the refurbishment and upgrading of the water treatment plant in Bukit Sah, Kemaman, where BEWG has been awarded the role of Design & Build Contractor by the Terengganu State Government.
Commenting on the issuance, BEWG chief executive officer Datuk Vence Ong said this was a landmark transaction which represents a number of firsts for BEWG and the Malaysian sukuk market.
“This is BEWG’s first-ever debt capital market instrument, the first ringgit denominated Sukuk by a China-owned company for water infrastructure funding, and the largest ringgit denominated Sukuk issuance by a China-owned company to-date.
“The issuance has also enabled the Beijing Enterprises group to diversify its funding sources in Malaysia, which had so far been limited to bank loans.
“This water treatment project is not only important for the state of Terengganu and its people, but it also represents strong relations between China and Malaysia, in particular with the Terengganu State Government.
The refurbished and upgraded water treatment plant will ensure reliable water supply to the Kemaman district which houses Peninsular Malaysia’s oil and gas production and refinery operations, and accounts for about 22 per cent of the state’s 1.2 million population.
“This project is poised to meet the growing demand from industrial areas in Teluk Kalong and Kerteh which, in turn, will help promote the state’s longterm economic growth<” ong said in a statement yesterday.
CIMB Investment Bank Bhd (CIMB IB) and Maybank Investment Bank Bhd (Maybank IB) are the joint principal advisers, joint lead arrangers and joint lead managers for the Sukuk Wakalah, while Affin Hwang Investment Bank Bhd, Industrial and Commercial Bank of China (Malaysia) Bhd and RHB Investment Bank Bhd are the joint lead managers.
The issuance is an important milestone for BEWG in enhancing its profile and increasing its recognition among local investors, paving the way for future fundraising exercises in Malaysia.
Further, the issuance also serves to expand the diversification opportunities for investors in the local debt capital markets. The oversubscription of the Sukuk Wakalah is a testament to the receptiveness of the local market in welcoming foreign issuers.
This is BEWG’s first-ever debt capital market instrument, the first ringgit denominated Sukuk by a China-owned company for water infrastructure funding, and the largest ringgit denominated Sukuk issuance by a China-owned company to-date. Datuk Vence Ong, BEWG chief executive officer