Sarawak Enterprise subsidiaries approved for RM 1.115 billion Islamic note programs

By Angela McDaniels

Seattle, Sept. 20 - Sarawak Enterprise Corp. Bhd. said the Sukuk note programs of its subsidiaries Sarawak Power Generation Sdn. Bhd. and Mukah Power Generation Sdn. Bhd. have received approval from the Securities Commission of Malaysia.

Sarawak Power's program is for up to RM 215 million Sukuk senior notes, which will be issued under the Islamic principle of Musharakah and have maturities from 1.5 to 15 years. Rating Agency Malaysia Bhd. has rated them AA1.

Mukah Power's program is for up to RM 655 million Sukuk senior secured notes in five tranches and up to RM 285 million of Sukuk junior notes.

The senior notes will be issued under the Islamic principles of Mudharabah and Istisna, and the junior notes will be issued under the Islamic principle of Mudharabah. Tranches one through four of the senior notes will have maturities from four to 15 years while tranche five will have a maturity of two to three years. Rating Agency Malaysia Bhd. has rated them AA3.

The junior notes will have maturities from 15 to 25 years. and have been rated A2.

Sarawak Enterprise said the primary subscriber for the notes of both companies will be RHB Islamic Bank Bhd., which will also be the lead arranger for the offerings. Amanah Raya Bhd. will be the trustee.

Proceeds from Sarawak Power's notes will be used to pay note program-related expenses, to fund the Sukuk distribution account for the notes, to finance the subscription of up to RM 210 million of Mukah Power's Sukuk junior notes and for general working capital.

Proceeds from Mukah Power's notes will be used to partially repay shareholders' advances that have been used to pay site-acquisition costs related to a power plant to be constructed in Mukah, Sarawak, prior to the initial issuance of the junior notes; to partially finance the construction of the power plant; to pay note program-related expenses; to fund the Sukuk payment account for the senior notes and for general working capital.

Proceeds from the Mukah's junior notes will also be used to meet the company's obligations under the Istisna sale agreement to be entered into with RHB Islamic Bank Bhd., to pay Istina profit during the project construction period and to meet its contingent requirements in the event of project cost overrun.

Sarawak Enterprise is a electric utility company based in the Malaysian state of Sarawak.

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