U Mobile converts RM1.4bil loan into sustainability-linked financing

KUALA LUMPUR: U Mobile has converted its existing banking facility of up to RM1.4 billion into a sustainability linked financing (SLF) through its collaboration with CIMB Bank Bhd and United Overseas Bank (Malaysia Bhd (UOB Malaysia).

In a statement, the telecommunication company said the conversion of the loan was facilitated by CIMB as sustainability structuring agent as well as joint lender and sustainability lead arranger with UOB Malaysia.

It said the deal is aligned with U Mobile’s overall sustainability strategy and it is entitled to receive rebates on its loan interest rate based on the achievement of ambitious sustainability performance targets (SPTs) which are subjected to stringent independent third party verification.

Under the SPT, U Mobile has committed to reduce its Scope 1 and 2 carbon emissions through the implementation of energy-efficiency and solar power projects for its business and operations, it said.

CIMB Group co-chief executive officer of group wholesale banking Novan Amirudin said the SLF is a testament to CIMB’s commitment towards helping its clients advance their sustainability goals.

“This is in line with CIMB Group’s ambition to become a leading focused Asean bank and Asean sustainability leader under our Forward23+ strategic plan,” said Novan.

Meanwhile, UOB Malaysia managing director and country head of wholesale banking Andy Cheah said that as part of the bank’s net-zero commitments, UOB Malaysia is focused on supporting its clients’ transition by providing them with the right green solutions as they advance on their ESG journey.

“By converting its existing banking facilities into SLF, U Mobile is able to meet its financial needs while achieving its sustainability ambitions. We are proud to support U Mobile’s commitment to deliver responsible growth, which is balanced with its environmental obligations,” said Cheah. – BK