Friday August 31, 2012
Sime plans US$1.5bil Islamic bond
KUALA LUMPUR: Sime Darby Bhd, the world’s biggest listed palm oil producer, is planning its first multi-currency Islamic bond programme of as much as US$1.5bil in Malaysia to raise funds for capital expenditure.
“We are having ongoing discussions with bankers,” Tong Poh Keow, the group chief financial officer, said in an interview in Kuala Lumpur yesterday. “The first issuance will likely be in dollars.”
The group, which also has interests in industries ranging from property to heavy machinery in more than 20 countries, has total debt of RM3.3bil, according to data compiled by Bloomberg.
The company plans to increase capital expenditure by 23% to RM7.75bil in the current fiscal year ending June 30, 2013, chief executive officer Datuk Mohd Bakke Salleh told reporters here on Wednesday, after releasing earnings results.
Sime joins Malaysia’s Axiata Group Bhd. in seeking to tap funds in the US$1.3 trillion global Islamic finance industry. The telecommunications company announced last month that it received regulatory approval to start a similar- sized multi-currency sukuk programme.
Sales of corporate Islamic bonds in Malaysia, the biggest market for the debt that pays returns on assets instead of interest, are approaching a record in 2012. – Bloomberg