Principal Terms and Conditions of the Proposal

Transcription

1 BACKGROUND INFORMATION Principal Terms and Conditions of the Proposal 1(A) Issuer - Name Special Port Vehicle Berhad ( SPV ) - Address Unit A-11-8, 11 th Floor Megan Phileo Promenade No. 189, Jalan Tun Razak Kuala Lumpur - Business Registration No T - Date / Place of Incorporation 17 June 2003 / Malaysia - Date of Listing (in case of a public listed company) - Status Resident controlled company Non-bumiputera controlled company - Principal Activities The Issuer is a special purpose vehicle incorporated solely for the purpose of the proposed securitisation of the Repayment Amount and structured as a "bankruptcy remote" company. The objects of the Issuer as set out in its Memorandum of Association are limited to the acquisition of the Repayment Amount, the issue of the Bonds, the provision of security under the Bonds and such other things incidental and conducive for the attainment of the foregoing. - Board of Directors (i) Lim Kean Chai (ii) Gopal Sreenevasan 1

2 - Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders SPV is wholly owned by the Share Trustee i.e. Asia Pacific International Trust (Labuan) Berhad. The shareholders and directors of Asia Pacific International Trust (Labuan) Berhad are Venu a/l K.P. Nair and Lim Choon Wee. - Authorised and paid-up capital Authorised : RM100,000 comprising 100,000 ordinary shares of RM1.00 each Paid-up : RM2.00 comprising two (2) ordinary shares of RM1.00 each. (B) Originator (in the case of asset-backed securities) - Name Kuala Dimensi Sdn Bhd ( KDSB ). - Address 5 th Floor, Wisma Wijaya Baru No.1, Jalan 215 Section 51, Off Jalan Templer Petaling Jaya Selangot Darul Ehsan - Business Registration No V - Date / Place of Incorporation 22 May 1994 / Malaysia - Date of Listing (in case of a public listed company) Not applicable - Status Resident controlled company Non-Bumiputera controlled company - Principal Activities Property development 2

3 - Board of Directors Name Dato Seri Tiong King Sing Dato' Abdul Azim bin Mohd Zabidi Idris bin Mat Jani Omar bin Abdul Latip Position President/Chief Executvie Officer Chairman Executive Director Director - Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders The shareholder of KDSB is as follows:- Name Wijaya Baru Holdings Sdn Bhd No. of ordinary shares % held 30,000, Wijaya Baru Holdings Sdn Bhd in turn is 70.0% owned by Dato Seri Tiong King Sing. - Authorised and paid-up capital Authorised: Paid-up: RM50,000,000 comprising 50,000,000 ordinary shares of RM1.00 each. RM30,000,000 comprising 30,000,000 ordinary shares of RM1.00 each. PRINCIPAL TERMS AND CONDITIONS 2. Names of parties involved in the proposed transaction (where applicable) i. Principal Adviser(s) / Lead Arranger(s) Malaysian International Merchant Bankers Berhad ( MIMB ) ii. Arranger(s) iii. Valuers iv. Solicitors Legal Counsel (for securitisation transaction) - Messrs. Cheang & Ariff Legal Counsel (for Lead Arranger) Messrs. Hisham Sobri & Kadir 3

4 v. Financial Adviser vi. Technical Adviser vii. Guarantor viii. Trustee (a) (b) Bonds Trustee and Bonds Security Trustee Pacific Trustees Berhad Share Trustee Asia Pacific International Trust (Labuan) Berhad ix. Facility Agent MIMB x. Primary Subscriber(s) and Amount subscribed (where applicable) Primary Subscriber - MIMB Amount Subscribed RM1.31 billion (Nominal Amount) xi. Underwriter(s) and amount underwritten xii. Syariah Adviser (where applicable) xiii. Central Depository Bank Negara Malaysia xiv. Paying Agent Bank Negara Malaysia xv. Reporting Accountant Messrs. Ernst & Young 4

5 xvi. Others (please specify) Transaction Administrator - PCA Corporate Services Sdn Bhd Obligor - Port Kelang Authority ("PKA") Servicer - MIMB 3. Principle (Conventional / Islamic) Conventional 4. Facility Description Asset-Backed Serial Bonds ("Bonds"). 5. Issue Size (RM) Up to RM1.31 billion (Nominal Amount). 6. Issue Price (RM) To be issued at par for up to RM1.31 billion (Nominal Amount). 7. Tenor of the facility / issue Eleven (11) series with tenure ranges from four (4) to fourteen (14) years as follows:- Series Tenure (Years) Amount (RM million) Series Series Series Series Series Series Series Series Series Series Series Total 1,

6 8. Interest / Coupon / Profit or equivalent rate (%) The Bonds shall be issued at par at the following yield to maturity levels: Series YTM (% per annum) Interest / Coupon / Profit Payment frequency Semi-annual in arrears. 10. Interest / Coupon / Profit Payment basis The profit shall be calculated on the basis of the actual number of days elapsed in a year of three hundred and sixty-five (365) days. 11. Yield to Maturity (%) The yield to maturity for each series of the Bonds is the same as interest rate as outlined in item 8 above in view that the Bonds is to be issued at par. 12. Security / Collateral (if any) The Security shall consist of the following: (a) (b) Absolute legal assignment executed between KDSB and SPV assigning all KDSB's rights, titles and benefits in relation to the Repayment Amount due to KDSB from PKA arising under the Sale and Purchase Agreement dated 12 November 2002 ("SPA"); Debenture consisting of first fixed and floating charges on all assets of SPV, present and future; 6

7 (c) A principal charge on the following accounts to be created by SPV: (i) (ii) (iii) (iv) Collection Account; Payment Account; Finance Service Reserve Account; and Coupon Service Payment Account. (d) (e) (f) A principal charge on the Infrastructure Reserve Account to be created by KDSB; Assignment of workmen's compensation policy in relation to the Infrastructure Work; and Undertaking by KDSB to SPV for the construction, completion and delivery of the Infrastructure Work as stipulated under the Vendor s Obligations under the SPA. Note : The five (5) accounts highlighted in items (c) and (d) above shall be collectively referred to as the "Designated Accounts". 13. Details on utilisation of proceeds Proceeds from the Bonds will be utilised by SPV and KDSB as follows:- SPV Utilisation Amount (RM) i. Bonds issuance cost including SPV s cost and expenses Up to 1,134,100 ii. Required deposit into the Coupon Service Payment Account Up to 267,070,000 iii. Initial required deposit into the Finance Service Reserve Account Up to 33,383,750 iv. Payment to KDSB for the purchase of the Repayment Amount Up to 1,008,412,150 Total Up to 1,310,000,000 7

8 KDSB Funds totalling RM1,008,412,150 from SPV as highlighted under item (iv) of the above table shall be utilised by KDSB as follows:- Utilisation Amount (RM) i. Required deposit into the Infrastructure Reserve Account Up to 175,000,000 ii. Payment to KPPLB for the remaining balance of the Said Land Up to 53,000,000 pursuant to the Sale and Purchase Agreement dated 16 November 2000 iii. Payment to Great Profile Sdn Bhd for its share of the proceeds in the Up to 130,557,649 sale of the Said Land under the SPA iv. Full repayment of the outstanding amount due under loans granted Up to 270,000,000 by Sabah Development Bank Berhad to KDSB, which were subsequently sold to Pengurusan Danaharta Nasional Berhad v. Full repayment of the outstanding amount due under a term loan Up to 250,000,000 granted by Bumiputra Commerce Bank Berhad to Great Profile Sdn Bhd's holding company, Wijaya Baru Global Berhad, which was used to pay part of the purchase price on behalf of Great Profile Sdn Bhd pursuant to the Sale and Purchase Agreement dated 24 November 1997 vi. Payment to trade creditors as follows:- Wijaya Baru Construction Sdn Bhd Wijaya Baru Sdn Bhd Up to Up to 29,022,584 56,299,712 vii. For working capital requirements in relation to the development of Up to 44,532,205 Phase 1 of the Transhipment Megahub/Free Trade Zone under the Development Agreement dated 27 February 2003 and Supplemental Agreement dated 26 May 2003 between KDSB and PKA as follows:- Preliminaries Design works Site preparation Temporary utilities supplies Total Up to 1,008,412,150 Note:- With regard to items (ii) to (vii) above, the Facility Agent/Bonds Trustee/Bonds Security Trustee shall retain the said amount on behalf of KDSB in the Collection Account upon issue of the Bonds and shall only remit to the relevant parties upon receipt of a letter of final certification by independent consultant confirming the full completion of the reclamation works required as stipulated under the Vendor s Obligations of the SPA. Any interest accrued under the amount to be retained shall only be paid to KDSB upon the release of the retention sum to the relevant parties accordingly. 8

9 14. Sinking fund (if any) / Designated Accounts Collection Account ( CA ) : The Issuer will open a CA for the purpose of capturing the Repayment Amount to be paid by PKA and all other revenue proceeds received by the Issuer including the proceeds from the Bonds issue. The CA shall be solely operated by the Facility Agent. Monies in the CA shall be utilised as follows: 1. According to the priority as delineated under the item 13 above; 2. Transfer into the Finance Service Reserve Account; and 3. Transfer into the Payment Account. Payment Account ( PA ) : The Facility Agent shall remit on a quarterly basis, amounts from the Collection Account into the PA for the servicing of the Bonds, payment of operational and administrative overheads, professional fees and expenses related to the issuance of the Bonds in the following order of priority: 1. Interest servicing of the Bonds; 2. Principal repayment of the Bonds; 3. SPV's cost and administrative expenses; 4. Taxes payable; and 5. Any other incidental cost incurred by SPV. The PA shall be jointly operated by the Facility Agent and the Issuer. The quantum of the funds transferred will be based on a quarterly operating/capital expenditure budget which shall be approved by the Board of Directors of SPV and shall be submitted to the Facility Agent fourteen (14) days prior to the commencement of the next budget period. The budget shall contain reasonably detailed and itemised estimate of the amount of income to be received by SPV and the amount of the expenditure to be incurred by SPV for each month during the budget period. Should there be insufficient funds during the budget period, then SPV shall be entitled to submit to the Facility Agent a Supplementary Budget requesting further funds of no greater than 25% of the budgeted amount for that period of utilisation during that budget period. SPV shall be entitled to only one (1) Supplementary Budget per budget period. Finance Service Reserve Account ( FSRA ) : The Issuer shall be required to ensure that an amount equivalent to the next six (6) months Bonds interest /coupon servicing shall be deposited in the FSRA, commencing immediately from the issue of the Bonds. The FSRA shall be jointly operated by the Facility Agent and the Issuer. 9

10 Infrastructure Reserve Account ( IRA ) : SPV shall be required to remit into the IRA an amount of RM175.0 million for the completion and delivery of the Infrastructure Work, including any projections for cost overruns. Monies in this account for any reclamation works shall be released directly to the sub-contractor, progressively based on invoices/documentary evidence on works done in relation to the reclamation works, to be certified by an independent consultant within fourteen (14) days from the certification. Monies in this account for works other than the reclamation works under Infrastructure Work shall be released to KDSB progressively based on invoices/documentary evidence on works done to be certified by an independent consultant within fourteen (14) days from certification. The unutilised portion standing in the IRA after final certification by the independent consultant that the Infrastructure Work has been fully completed shall be remitted to KDSB within fourteen (14) days after certification less all outstanding payments for the Infrastructure Work (if any). The Transaction Administrator will verify through the independent consultant and KDSB the outstanding payments (if any) within the said fourteen (14) days. This account shall be jointly operated by the Facility Agent and the Issuer. Coupon Service Payment Account ( CSPA ) : The Issuer shall remit into the CSPA an equivalent amount of monies of an estimated forty eight (48) months of coupon servicing to service any coupons during the moratorium period of four (4) years from the date of the SPA. The remittance shall commence immediately from the issue of the Bonds. This account shall be jointly operated by the Facility Agent and Issuer. 15. Rating Credit Rating Assigned (please specify if this is an indicative rating) Name of Rating Agency Malaysia Rating Corporation Berhad ("MARC") has assigned an indicative rating of AAA for the Bonds. 16. Form and Denomination The Bonds will be in bearer form, in the denominations of RM1.0 million each and in multiples of RM1.0 million. The Bonds will be represented by a global certificate to be deposited with BNM and will be traded under the Scripless Securities Trading System maintained by BNM. 10

11 17. Mode of Issue The Bonds will be issued without prospectus on a bought deal basis to the Primary Subscriber. The Bonds shall be issued in bearer form and will be prescribed under the Rules on Fully Automated System for Tendering ("FAST") and/or the Malaysian Scripless Securities Market under the Real Time Electronic Transfer of Funds and Securities ("RENTAS") system and/or by any other guidelines issued by the relevant authority(ies). Tender Criteria : Not Applicable 18. Selling Restriction a. The Bonds may not be offered or sold directly or indirectly, nor may any document or other material in connection therewith be distributed in Malaysia other than to persons falling within any of the categories of persons specified under in Schedule 2 and/or Schedule 3 of the Securities Commission Act 1993 ( SCA 93 ) (as amended). b. For the purchasers of the Bonds who are non-residents as defined under the Exchange Control Act 1953, any payment for the purchase of the Bonds must be made in foreign currency equivalent to the purchase price of the Bonds or in Ringgit Malaysia drawn from an External Account (as defined under the Exchange Control Act 1953). 19. Listing Status The Bonds will not be listed on the Kuala Lumpur Stock Exchange ( KLSE ) or any other stock exchange. 20. Minimum Level of Subscription (RM or %) 100% 21. Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) The SPA is conditional upon the following: (a) (b) the consent to sell and/or transfer from the Selangor State Authority to transfer all that piece of land held under Pajakan Negeri 7324 Lot Daerah Klang Mukim Klang State Selangor having an area measuring hectares or approximately 43,538,200 square feet or acres at Pulau Indah ("Said Land") in favour of PKA being obtained (hereinafter referred to as the "Consent to Transfer"); the Foreign Investment Committee ("FIC") shall have approved the acquisition of the Said Land on such terms and conditions which are acceptable by PKA (hereinafter referred to as the "FIC Approval"); 11

12 (c) (d) the approval of the board of directors of KDSB being obtained (hereinafter referred to as the "Board of Director's Approval") for the disposal of the Said Land; and the approval of the Selangor State Authority on the conversion of category of land use to "industrial" (hereinafter referred to as the "Conversion Approval"). (the Consent to Transfer, the FIC Approval, the Board of Director's Approval and the Conversion Approval shall hereinafter collectively referred to as "Conditions Precedent") As at 17 June 2003, KDSB has complied with all the Conditions Precedent under the SPA as follows:- (a) The Land Office of the State of Selangor had issued a letter dated 16 June 2003 stating that it has no objection to have the Said Land transferred to PKA provided consent from registered chargees and caveators are obtained and that quit rent has been paid; (b) The FIC has approved the acquisition of the Said Land by PKA from KDSB pursuant to the letter dated 8 May 2003; (c) The Board of Directors of KDSB has approved the disposal of the Said Land pursuant to its Board Resolution dated 8 November 2002; (d) The Land Office of the State of Selangor had pursuant to the letter dated 11 June 2003 informed KDSB that it has no objection to change the approved composition of land use as stated in its letter dated 30 July 1996 to wholly for industrial use. At the request of the said land office, a layout plan had been submitted to it on 13 June 2003; and (e) Pursuant to the letter dated 13 June 2003, the Municipality of Klang has written to Land Office of the State of Selangor that it has no objection to the change in the composition in the land use as per (d) above. Consent from PKA on the creation of the assignment over the Repayment Amount Based on PKA's letter dated 24 June 2003, PKA is agreeable to assign the Repayment Amount to SPV in relation to the Bonds. 22. Additional information for Islamic PDS 23. Conditions Precedent Conditions and clauses standard for transactions of this nature and as advised by the solicitors and the rating agencies but not limited to the following: i) The Bonds shall be subject to the prior approval of the Securities Commission ("SC") and/or any other authorities having jurisdiction over matters pertaining to the Bonds; ii) iii) The operation of the Bonds shall at all times be governed by guidelines issued and to be issued by the SC and/or other authorities having jurisdiction over matter pertaining to the Bonds; The Bonds shall have obtained a minimum rating of AAA from MARC at the point of issue; 12

13 iv) Receipt of solicitor s confirmation that the Transaction Documents and any other relevant documents pertaining to the Bonds shall have been executed, stamped and presented for registration, if applicable; v) Receipt of a Letter of Support from the Ministry of Transport confirming that PKA will pay the Repayment Amount within the Repayment Period; vi) vii) All conditions precedent as detailed in the SPA have been fulfilled and complied; A letter of release/legal confirmation from Great Profile Sdn Bhd indicating that it has no claim or rights over the Said Land; 24. Representatives and Warranties Representations and warranties standard for transactions of this nature and as advised by the solicitors and the rating agencies but not limited to the following: i) The Issuer and KDSB are companies duly established and validly existing with limited liability under the Laws of Malaysia and guidelines of Securities Commission; ii) iii) iv) The Issuer s Memorandum and Articles of Association incorporating provisions which authorise the Issuer to issue the Bonds with the law and guidelines of Securities Commission; KDSB is a solvent company prior and during the transfer of the Assets and until the completion of the Infrastructure Work as to be confirmed by Messrs Ernst & Young, the reporting accountant; No change of business or financial position of KDSB and the Issuer which may have a material adverse effect; v) All necessary licences, approvals and permits have been obtained and are valid; and vi) No event of default or breach in the SPA by KDSB. The event of default or breach are:- (a) (b) (c) (d) Failing to complete the Infrastructure Work within time; Failing to observe all the laws and rules of authorities (Local Authorities); Failing to get conversion of the land use to industrial; and Failing to execute documents required by PKA to sublease (if required). 13

14 25. Events of Default Standard events of default for financing facility of this nature as advised by the solicitors including but not limited to: i) non payment of amounts due in respect of the Bonds; ii) breach by the Issuer of its obligations under the transaction documents which include; (a) (b) default being made in the payment of the principal or coupon in respect of any of the series of the Bonds for at least sixty (60) days and thereafter upon expiry of at least thirty (30) days notice to the Issuer to comply with the same as and when the same ought to be paid in accordance with the Trust Deed; or the Issuer failing to perform or observe any covenant, condition or provision or any of its obligations under the Trust Deed and such failure continuing for the period of thirty (30) days next following the service by the Bonds Trustee on the Issuer of a notice requiring the same to be remedied. iii) iv) insolvency, winding up, administration of the Issuer; and Issuer ceases to carry on business. 26. Principal terms and conditions for warrants (where applicable) 27. Other principal terms and conditions for the issue Assets : The Repayment Amount assigned by KDSB to SPV pursuant to the absolute legal assignment executed between KDSB and SPV. Investors : Primary Subscriber and/or persons falling within any of the categories of persons specified either in Schedule 2 or Schedule 3 of the Securities Commission Act, 1993 (as amended) of Malaysia. Credit Enhancement : The Bonds will benefit from the credit support provided by the: 1. CSPA; 2. FSRA; 3. IRA; and 4. Undertaking for the Infrastructure Work by KDSB. 14

15 Right to make Permitted Investments : The Issuer may from time to time utilise the funds held in the Designated Accounts to make the Permitted Investments or to make other investments approved by the Bonds Security Trustee, provided that such Permitted Investments are charged to Bonds Security Trustee and such funds utilised for such investments must be remitted back to the said account in a timely manner (at least five (5) business days prior to due date) to meet any payment obligations of the Issuer when due and payable. The Permitted Investments must be denominated in Ringgit Malaysia. Permitted Investments mean the following: 1. Deposits in accounts and negotiable certificates of deposits issued by licensed financial institutions; 2. Bonds, treasury bills or debt instruments issued or guaranteed by the Government of Malaysia; and 3. Capital market instruments issued by licensed financial institutions subject to a minimum rating of A+ and MARC-1 and/or other debt or capital market instruments of private entities subject to a minimum rating of AA+ or MARC-1 or their equivalent rating by MARC and/or Rating Agency Malaysia Berhad. Status : The Bonds constitute direct, secured, limited recourse and unconditional obligations of the Issuer and are secured by the Security. The Bonds shall rank pari passu without any preference among themselves and shall rank in priority to any other obligation of the Issuer (if any). Trading of Bonds : The Bonds shall be traded in the secondary market on a willing-buyer willing-seller basis. Purchase and Cancellation Mandatory Redemption Material Adverse Effect : The Issuer may at any time purchase the Bonds in the open market at any price or by private treaty. The Bonds purchased will be cancelled and may not be resold or reissued. : Unless previously redeemed, purchased and cancelled, the Bonds shall be redeemed at their respective face values on the respective maturity dates of the series. : An event adversely affecting in a material way the financial ability of the Issuer to discharge its obligations under any financial instrument binding upon it. 15

16 Availability Period : Upon completion of documentation and compliance of all relevant conditions to the reasonable satisfaction of the Lead Arranger and the Facility Agent, the Bonds shall be issued within six (6) months from the date of the SC approval or such other period as approved by the SC from time to time. Covenants : Covenants standard for transactions of this nature and as advised by the solicitors and the rating agencies but not limited to the following:- i) SPV will allow Facility Agent/BondsTrustee to substitute the subcontractor for the construction and completion of the Infrastructure Work in the event of any breach in performance or nonperformance by the existing contractor; (ii) SPV to deposit of monies into the Finance Service Reserve Account being the next succeeding 6 months coupon payment obligation under the Bonds must be maintained throughout the tenor of the Bonds. (iii) Negative pledge by SPV; (iv) Maintenance of proper accounts and records by SPV to enable a complete and accurate view to be formed of its assets, liabilities, income and expenditure; (v) Compliance with all regulatory requirements with respect to the Bonds by SPV, (vi) SPV shall not carry out any other activities apart from those stated in its Memorandum and Articles of Association; (vii) No disposal of assets other than as set out in the Transaction Documents by SPV; (viii) No distribution of dividends other than as set out in its constituent documents by SPV; (ix) No other indebtedness to be incurred by SPV; (x) No merger to be undertaken by SPV; and (xi) SPV/the Share Trustee shall inform the Bonds Trustee of any change of Transaction Administrator. Special Conditions : (i) KDSB/Sub-contractor shall undertake to complete all reclamation works under the Vendor s Obligations within sixteen (16) weeks (or any other period as confirmed by the sub-contractor and agreed by the Facility Agent/Bonds Trustee/Bonds Security Trustee) from the date of commencement of work. In case of any delay, any liquidated assessed damages payments (if any) from the sub-contractor will be assigned directly to SPV; and (ii) KDSB shall undertake to notify the Facility Agent/Transaction 16

17 Administrator/Bond Trustee within seven (7) days prior to purchase of the Bonds in relation to the purchase to be made after the date of issue of the Bonds. Under the Guidelines on the Offering of Asset Backed Securities, KDSB may only purchase the Bonds issued by SPV up to 10% of the original amount of the Bonds issued by SPV at market value at any time unless otherwise permitted by the SC. Obligations of Issuer Obligations of Originator Obligations of Servicer Obligations of Substitute Servicer : To pay coupon rate, to pay principal on the Bonds, to execute all transaction documents, to open Designated Accounts and to conduct its affair in a proper and official manner. : To complete the Infrastructure Work and to discharge the charges and caveats by use of proceeds of the Bonds. : To collect payment from PKA into the Collection Account and to further transfer payment to other accounts under the Designated Accounts. : Same as the Servicer. Other Conditions : The Bonds will moreover be at all times governed by such rules and directives (whether or not having the force of law) required of or imposed on the Primary Subscriber/Investors/bondholders by the SC or any other appropriate authorities. Clear Market Provisions : The Issuer shall agree not to enter the market for any kind of loan, note or bond issue in which it is the borrower/debtor or guarantor, save in the ordinary course or business, from the date of mandate for the Bonds until the issue of the Bonds, unless it has obtained the Lead Arranger's prior written consent. Taxes : All payments shall be made free and clear of all present and future taxes, duties, withholdings or other deductions whatsoever imposed by Government of Malaysia or any political sub-division or tax authority thereof unless required by the laws and regulations. Fees, Costs and other Expenses : For the account of the Issuer. Governing Law : Laws of Malaysia 17