|Description||Proposed Issue, Offer Or Invitation To Subscribe Or Purchase Of Unrated Subordinated Perpetual Sukuk based on the Shariah Principle of Mudharabah (“Sukuk Mudharabah”) pursuant to a Sukuk Mudharabah Programme of up to RM1,000.0 Million in Nominal Value (“Sukuk Mudharabah Programme”)|
AirAsia Berhad (“AirAsia” or the “Company”) is pleased to announce that the Company proposes to establish the Sukuk Mudharabah Programme as part of AirAsia’s funding plan and has mandated AmInvestment Bank Berhad to be the sole Principal Adviser, Lead Arranger, Lead Manager and Facility Agent for the Sukuk Mudharabah Programme.
In relation to the above, the Company is pleased to announce that the Securities Commission Malaysia (“SC”) has approved the establishment of the Sukuk Mudharabah Programme and issuance of Sukuk Mudharabah thereunder vide its letter dated 29 October 2014. This approval is subject to compliance with the relevant requirements pertaining to the implementation of the Sukuk Mudharabah Programme as stipulated under the SC’s Guidelines on Sukuk revised on and effective from 28 August 2014 (“Guidelines on Sukuk”).
The Sukuk Mudharabah shall be recognised as equity capital from an accounting perspective.
2. SALIENT FEATURES OF THE SUKUK MUDHARABAH
- Perpetual in tenure, where AirAsia has a call option to redeem the Sukuk Mudharabah at the first call date, which is at end of the fifth, seventh or tenth year to be determined prior to issuance, and on each subsequent periodic distribution date thereafter.
- AirAsia also has the option to redeem the Sukuk Mudharabah under accounting event, tax event, leverage event and shareholder/shareholding event, all of which are further described in the Principal Terms and Conditions of the Sukuk Mudharabah Programme.
- Periodic distributions on the Sukuk Mudharabah can be deferred (in part or in full) at AirAsia’s option, where the deferred periodic distributions are cumulative and not compounding.
- The Sukuk Mudharabah will be issued under the Shariah principle of Mudharabah, an approved Shariah principle under the Guidelines on Sukuk. In addition, the Shariah principle of Musawamah will also be applied in situations of periodic distribution deferment by the Issuer and when the maximum periodic distribution rate applies due to non-redemption by the Issuer under the leverage event or shareholding/shareholder event.
- The Sukuk Mudharabah will not be rated.
- Payment obligations on the Sukuk Mudharabah will at all times, rank ahead of other share capital instruments or security for the time being outstanding, but junior to the claims of all other present and future creditors of AirAsia (other than obligations ranking pari passu with the Sukuk Mudharabah).
3. UTILISATION OF THE PROCEEDS
The proceeds raised from the Sukuk Mudharabah Programme shall be utilised by AirAsia for Shariah-compliant purposes as below:
(i) Up to RM550.0 million to part finance the capital expenditure requirements of AirAsia (Note 1 and Note 2);
(ii) Up to RM2.5 million as estimated expenses relating to the Sukuk Mudharabah Programme (Note 2);
(iii) Up to RM300.0 million to refinance banking facility granted to the Issuer; and
(iv) The remaining balance for Shariah-compliant working capital purposes (Note 3).
Note 1: The capital expenditure requirements pursuant to, without limitation, AirAsia’s aircraft purchase programme whereby deposits and/or contributions are required for the transaction and purchase of the relevant spare parts.
Note 2: Unutilised balance for item (i) and/or item (ii) and/or item (iii) could be utilised for item (iv).
Note 3: AirAsia will use the proceeds, without limitation, to meet AirAsia’s Shariah-compliant working capital requirements to support its business operations, administrative and operating expenses. These include meeting aircraft maintenance reserves and deposits for fuel hedging and fuel payment and other hedging activities. Other hedging activities include but are not limited to foreign currency hedging and interest rate hedging. In addition, the hedging activities undertaken by AirAsia is for supporting the business of AirAsia and not for the purpose of speculation. AirAsia shall endeavour on a best efforts basis to use Shariah-compliant hedging instruments if they are available and competitive in the market. For the avoidance of doubt, the proceeds would exclude working capital requirements related to financial services or other businesses which are Shariah non-compliant.
This announcement is dated 30 October 2014.
|Company Name||AIRASIA BERHAD|
|Date Announced||30 Oct 2014|