Tex Cycle buys Chin Hin debt notes

Tex Cycle Technology (M) Bhd subscribed for Rm10mil in nominal value of perpetual medium-term notes (perpetual MTN) issued by Chin Hin Group Bhd.

Tex Cycle said the perpetual MTN offers an annual return of 7.5%, which is significantly higher than its other investments in unit trust which offers an average return of 2.51% to 7.09% per annum.

It also gives the group a consistent and predictable source of income as interest is paid on a regular basis until the MTN is redeemed.

In a filing with Bursa Malaysia, Tex Cycle noted the proceeds raised from the issuance of the perpetual MTN will be utilised for capital expenditure, refinancing of existing financing or borrowings or future financing, working capital or other general corporate purposes of the Chin Hin group of companies.

The proceeds may also be utilised to cover fees, charges, and other costs associated with the creation and issuing of the perpetual MTN programme.

The first call date of the perpetual MTN will be five years from the issued date, Feb 9, 2029, in which the fixed initial coupon rate of 7.5% per annum will be paid semi-annually.

In addition, the initial coupon rate and the step-up rate of 1% per annum will be combined annually.

However, it is subjected to a maximum coupon rate of 15% per annum.

The perpetual MTN subscription is expected to have no impact on Tex Cycle’s gearing, audited consolidated net assets, net asset per share, or share capital.

It is also anticipated to have no material impact on the group’s consolidated earnings and earnings per share for the financial year ending Dec 31, 2024.

Aminvestment Bank Bhd is the principal adviser, lead arranger, lead manager and facility agent for the perpetual MTN programme.