By Lawrence Yong
Malaysia’s national utility Tenaga Nasional Bhd (TNB) will issue a RM1.625 billion sukuk (Islamic bond) with tenures of four to 23 years to finance the construction of a gas-fired power plant in Penang.
The sukuk to be issued in 39 tranches through its subsidiary, TNB Northern Energy Bhd, will be priced at 3.55 to 4.83 percent. Malaysian Rating Corporation Bhd. (MARC) has assigned an AAA rating to the sukuk, TNB said in a statement to Bursa Malaysia.
“The proceeds to be raised from the Proposed Sukuk TNB NE will be utilised for the construction and delivery and working capital requirement for the 1071.43 MW (megawatt) combined cycle gas-fired power plant in Prai,” TNB said.
The sukuk will be issued on May 29, 2013. Based on TNB’s audited consolidated balance sheet for the financial year ended August 31, 2012, TNB’s consolidated gearing would then increase from 0.39 times to 0.4 times after the issue, it said.
HSBC Amanah (Malaysia) Bhd (HSBC) and KAF have been appointed as the joint principal advisers, joint lead arrangers, joint lead managers and joint bookrunner.
According to MARC’s website, TNB Northern Energy is a wholly-owned funding vehicle of TNB Prai Sdn Bhd (TNB Prai) which in turn is wholly owned by TNB. TNB Northern Energy is using the sukuk proceeds to part-finance the construction of a RM2.49 billion Prai power plant.
The Engineering, procurement and construction (EPC) contract for the project has been awarded to Samsung E&C.
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