Tuesday January 25, 2011

Lion says unit should issue RM300mil sukuk

PETALING JAYA: Lion Industries Corp Bhd has proposed a RM300mil Islamic securities programme by way of sukuk by Antara Steel Mills Sdn Bhd to enable the latter to tap into the domestic capital market at competitive interest rates.

Antara is a wholly-owned subsidiary of Amsteel Mills Sdn Bhd, which is in turn a 99%-owned subsidiary of Lion Industries.

Through the Islamic securities programme, Lion Industries said in a filing with Bursa Malaysia that Antara would have cash inflow of RM300mil, of which RM130mil would be utilised to refinance the outstanding existing Islamic securities which were issued by Antara in 2005.

It said the balance would be utilised, among others, to fund Antara's capital expenditure and the working capital requirements of Antara's plants in Johor and Labuan.

“On a proforma basis, the proposed Islamic securities programme is expected to increase the gearing of the Lion group as at June 30, 2010 from 0.3 times to 0.4 times,” it said.

It said the programme would be arranged by AmInvestment Bank Bhd for Antara and would be placed to investors.

The tenor for the programme is seven years commencing from the date of issuance, with the repayment thereof to commence in the third year.

Barring any unforeseen circumstances, the programme is expected to be completed by March 2011.

LIONIND : [Stock Watch] [News]

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