Sabah’s O&G company achieves milestone with issuance of maiden RM900mil sukuk wakalah

KOTA KINABALU: SMJ Sdn Bhd (SMJSB), Sabah’s fledgling oil and gas company, has achieved a key milestone after successfully pricing its inaugural RM900mil Islamic medium-term notes (IMTN), or sukuk wakalah, on Oct 16.

This was issued out of its AAA-rated multi-currency sukuk wakalah programme of up to RM10bil, or its equivalent in other currencies, in nominal value.

AmInvestment Bank Berhad (AmInvestment Bank) is the sole principal adviser and lead arranger for the sukuk wakalah programme.

The Bank is also a joint lead manager together with Commerce International Merchant Bankers Bhd (CIMB) and Bank Pembangunan Malaysia Bhd (BPMB).

Sabah Finance Minister Datuk Seri Masidi Manjun told reporters the SMJSB could now acquire more assets through this new monetary source from the issuance of the sukuk wakalah IMTN.

“This is a financial instrument that enables the company to obtain capital for future business deals such as the acquisition of the Sabah International Petroleum Sdn Bhd (SIP) and others assets which will bring greater returns for the state,” he said on Friday (Oct 20).

SIP holds a 10% ownership stake in PETRONAS LNG9 Sdn Bhd that operates a liquefied natural gas (LNG) plant within the Bintulu LNG Complex.

The company will use the sukuk proceeds to part refinance its SIP’s existing borrowings.

Earlier, Sabah Chief Minister Datuk Seri Hajiji Noor witnessed the signing ceremony between SMJSB chief executive officer Dr Dionysia Kibat and AmInvestment Bank’s head of debts market Yeoh Teik Leng, to mark the inaugural issuance, at the Sabah International Convention Centre here.

Also present were State Secretary Datuk Seri Safar Untong, technical advisor to the Sabah government-cum-SMJSB special advisor Datuk Seri Lim Haw Kuang and AmInvestment Bank chief executive officer Tracy Chen, among others.

Masidi, who is also SMJSB chairman, in his speech earlier highlighted that SMSJB had a seed capital of RM50mil from the Sabah government when it was incepted in 2021, adding the company was now valued at RM2.3bil.

He also said that there were a lot more untapped oil and gas resources in Sabah, and that the state government, with SMJSB’s help, will achieve greater revenue sharing, greater say and greater participation in the oil and gas development in the state.

Dionysia said this first issuance of RM900mil was oversubscribed 3.9 times, with a total book of RM3.5bil.

This, she said, demonstrated the strong interest and confidence in Sabah and SMJSB in undertaking oil and gas activities for the best interest of the state.

Chen added this maiden issuance marks a testament of investors’ strong confidence in SMJSB’s financial performance and business outlook.

“Although SMJSB is investing in the hydro-carbon industry, SMJSB continues to partner reputable operators with established and proven environmental, social and governance practices and policies with set targets to reduce greenhouse gas emissions over time,” she said.