(i) Name : Eversendai Corporation Berhad ( Eversendai or the Issuer ) (ii) Address : Registered Address:

Transcription

1 EVERSENDAI CORPORATION BERHAD PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSED ISSUE 1. BACKGROUND INFORMATION (a) Issuer (i) Name : Eversendai Corporation Berhad ( Eversendai or the Issuer ) (ii) Address : Registered Address: Lot 19956, Jalan Industri 3/6, Rawang Integrated Industrial Park, Rawang Selangor Darul Ehsan Business Office: Lot 19956, Jalan Industri 3/6, Rawang Integrated Industrial Park, Rawang Selangor Darul Ehsan (iii) Business Registration No. : A (iv) Date /Place of Incorporation : 5 May 2003/Malaysia (v) (vi) Date of Listing (in case of a public listed company) Status (please indicate either resident controlled company or non-resident controlled company) : 1 July 2011 : Resident controlled company (vii) Principal Activities : Eversendai is principally involved in investment holding and provision of management services to the subsidiaries. Eversendai s subsidiaries are principally involved in steel fabrication, structural design, shop drawing services, and steel erection. (viii) Board of Directors (as at 20 November 2012) : Directors 1. Dato Nathan A/L Elumalay 2. Mohammad Nizar bin Idris 3. Tan Sri Rastam Mohd Isa 4. Datuk Ng Seing Liong JP 1

2 5. Nadarajan Rohan Raj 6. Narla Srinivasa Rao 7. S Sunthara Moorthy A/L S Subramaniam 8. Narishnath A/L Nathan (ix) Structure of shareholdings and names of shareholders or, in the case of public company, names of all substantial shareholders (as at 20 November 2012) : Substantial Shareholders Dato Nathan Elumalay No. of Ordinary Shares % 541,809, Citigroup Nominees (Tempatan) Sdn Bhd 83,939, Lembaga Tabung Haji 38,258, (x) Authorised share capital (as at 20 November 2012) : RM500,000,000 divided into 1,000,000,000 ordinary shares of RM0.50 each (xi) Paid-up share capital (as at 20 November 2012) : RM387,000,000 divided into 774,000,000 ordinary shares of RM0.50 each 2

3 2. PRINCIPAL TERMS AND CONDITIONS ( PTC ) (a) Names of the parties involved in the proposed transaction (where applicable) (i) Principal Adviser : Standard Chartered Saadiq Berhad ( SCSB ) (ii) Lead Arranger : SCSB (iii) Co-Arranger : Not applicable (iv) Solicitors : Wong & Partners (v) Financial Adviser : Not applicable (vi) Technical Adviser : Not applicable (vii) Trustee : Malaysian Trustees Berhad (viii) Guarantor : Not applicable (ix) Valuer : Not applicable (x) Facility Agent : SCSB (xi) (xii) Primary Subscriber (under a bought-deal arrangement) and Amount subscribed Underwriter(s) and amount underwritten : Not applicable : Not applicable (xiii) Shariah Adviser : Standard Chartered Saadiq Berhad. (xiv) Central Depository : Bank Negara Malaysia ( BNM ) (xv) Paying Agent : BNM (xvi) Reporting Accountant : Ernst & Young (xvii) Calculation Agent : Not applicable (xviii) Others (please specify) Lead Manager : SCSB. In the event there are other financial institution(s) identified later, if any, SCSB and these other financial institution(s) will be collectively referred to as the Joint Lead Managers. External Auditor : Ernst & Young (who will be performing agreed-upon procedures as an external auditor of the Issuer as agreed with the Issuer and Lead Arranger). (b) Facility description (including the description of Islamic principle) : Islamic Commercial Papers ( ICPs ) and/or Medium Term Notes ( IMTNs ) under an Islamic programme ( Sukuk Programme ). The ICPs and/or IMTNs shall hereinafter be referred to as Sukuk Musharakah. 3

4 The Sukuk Musharakah shall be issued under the Islamic principle of Musharakah which is one of the Shariah principles and concepts approved by the Shariah Advisory Council ( SAC ) of the Securities Commission ( SC ). Under the Musharakah structure, the potential investors in relation to a particular issue under the Sukuk Programme shall, from time to time, form a Musharakah ( Musharakah ) among themselves to invest directly into the Shariah compliant business of the Issuer ( Musharakah Venture ) via subscription of the Sukuk Musharakah to be issued by the Issuer. A Musharakah shall be formed for each series of the Sukuk Musharakah having the same Issue Date and Maturity Date. The Issuer will from time to time issue Sukuk Musharakah to investors ( Sukukholders ). Proceeds raised from the Sukuk Musharakah shall be used as capital contributions of the Sukukholders in the Musharakah Venture. Each Sukuk Musharakah shall represent the respective Sukukholder s undivided proportionate interest in the Musharakah Venture. Simultaneously, the Issuer shall make a declaration that it holds on trust a percentage of its interest in the business for the benefit of the Sukukholders. The Issuer will then issue the Sukuk Musharakah to the investors. The participation by the Sukukholders in the Musharakah Venture is via the subscription of Sukuk Musharakah issued by the Issuer. The capital contribution ratio of the Musharakah Partners (as defined below) in the Musharakah Venture shall be based on their respective capital contribution. The return expected by the Sukukholders under and from the relevant Musharakah Venture shall be the yield for the respective tranche of the Sukuk Musharakah up to the respective maturity date of the Sukuk Musharakah or the declaration of a Dissolution Event (as defined below), whichever is applicable ( Expected Return ). The Sukukholders will be entitled to income generated from the Musharakah Venture throughout the tenure of the Musharakah (their respective Entitlements ) and the rights of the Sukukholders against the Issuer under the Purchase Undertaking (as defined below). Any profit derived from the Musharakah Venture will be distributed based on a pre-agreed profit sharing ratio which will be determined prior to issuance of the Sukuk Musharakah from time to time. Any losses arising from the Musharakah Venture shall be borne by each partner in proportion to each partner s respective capital contribution in the Musharakah Venture. The Issuer shall be appointed as the manager ( Manager ) to manage the Musharakah Venture. The Sukukholders shall agree that any profit in excess of the Expected Return shall be retained by the Manager 4

5 as an incentive fee. In respect of Sukuk Musharakah with periodic distribution, income from the Musharakah Venture of up to an amount equal to a certain percentage of the face value of the Sukuk Musharakah per annum, calculated on the basis of the actual number of days in the relevant period ( Expected Periodic Distribution ) shall be distributed semi annually or such other period to be agreed between the Issuer and the Lead Manager. In the event that the Entitlements accruing to the Sukukholders in any given period is less than the Expected Periodic Distribution that are required to be paid to the Sukukholders during such period, the Issuer in its capacity as the obligor shall make advance payments equal to such shortfall (the Advance Payments ). In respect of Sukuk without periodic distribution, income from the Musharakah Venture of up to the Expected Return shall be distributed on a one-off basis upon the Dissolution Date ( One-off Distribution ), whichever is applicable. Any shortfall between the One-off Distribution and the actual income generated for such relevant period shall be paid by the Issuer as an advance part payment of the Exercise Price (as defined below). The Issuer shall declare and issue a Purchase Undertaking to the Trustee for and on behalf of the Sukukholders, wherein the Issuer undertakes to purchase the Sukukholders interest in the Musharakah Venture at an Exercise Price on Dissolution Date. Please refer to the Annexure for the illustrative diagram of the Sukuk Programme transaction structure. (c) Issue/programme size : Up to RM500.0 million in nominal value. The aggregate of outstanding IMTNs and ICPs shall not exceed the total available limit. (d) (e) Tenure of issue/sukuk programme (or facility) Availability period of sukuk programme (or facility) : The tenor of the Sukuk Programme shall be seven (7) years from the date of the first issue under the Sukuk Programme. ICPs between one (1) to twelve (12) months as the Issuer may select in consultation with the Lead Arranger, provided that the ICPs shall mature prior to the expiry of the Sukuk Programme. IMTNs More than one (1) year and up to seven (7) years as the Issuer may select in consultation with the Lead Arranger, provided that the IMTNs shall mature prior to the expiry of the Sukuk Programme. : The period commencing from the date on which all conditions precedent and utilisation conditions in relation to the Sukuk Programme have been fulfilled to the satisfaction of the Lead Manager and ending on such date falling seven (7) years after the first issue under the Sukuk Programme provided that the first issue under the Sukuk Programme shall not be later 5

6 (f) Profit/coupon/rental rate : ICPs than two (2) years from the date of the SC s approval. Not applicable as the ICPs shall be issued at a discount to nominal value. IMTNs To be determined at the point of issuance of the relevant IMTNs. (g) Profit/coupon/rental payment frequency : ICPs Not applicable. There will be no profit payable on the ICPs as the ICPs will be issued without Periodic Distributions. IMTNs IMTNs without periodic distribution: Not applicable. IMTNs with periodic distribution: In respect of profit bearing IMTNs, the expected profits are payable semiannually or such other period to be agreed between the Issuer and the Lead Manager in arrear from the date of issue of the IMTNs with the last profit payment payable on the maturity dates of the IMTNs or such period to be agreed between the Issuer and the Lead Arranger prior to each issuance of IMTNs. (h) Profit/coupon/rental payment basis : Actual / 365 days. (i) Security/collateral (if any) : Clean. (j) (k) Details on utilisation of proceeds by issuer/obligor and originator (in the case of ABS). If proceeds are to be utilised for project or capital expenditure, description of the project or capital expenditure, where applicable Sinking Fund and Designated Accounts (if any) : The proceeds raised from the issuance of the Sukuk Musharakah shall be utilized by the Issuer and/or any Subsidiary (as defined below) for general corporate purposes and/or for working capital requirement of the Issuer and/or any Subsidiary. The proceeds raised from the issuance of the Sukuk Musharakah, if utilised by the Subsidiaries of the Issuer, will be channelled to the Subsidiaries in the form of one of the Shariah compliant modes of financing (such as Wakalah, Murabahah, etc) or by way of investment in the Subsidiaries or through interest free inter-company advances, In any case, all utilization of funds from the issuance of the Sukuk Musharakah shall be for Shariah compliant purposes only including the manner in which the funds are to be channelled to the Subsidiaries of the Issuer. : Not applicable. (l) Rating : Credit rating(s) assigned (Please specify if this is an indicative rating or if the credit rating is not assigned for the full amount in the case of sukuk programme, adequate disclosures under The initial ratings for the Sukuk Musharakah are P 1 for the ICPs and AA 3 for the IMTNs respectively. 6

7 paragraph of these guidelines to be made) Name of rating agency RAM Rating Services Berhad. (m) Mode of issue : Via competitive tender without prospectus by the TPMs (as defined below) or private placement on a best effort basis or a bought deal basis. If the mode of issue is via competitive tender without prospectus by the TPMs, the Lead Arranger shall invite a selection of financial institutions and investors to participate as TPMs to bid for the ICPs and/or IMTNs. The composition of the tender panel may be varied from time to time by the Lead Arranger in consultation with the Issuer. Allocation of the ICPs and/or IMTNs to the bidders shall be based on ascending order of yield or descending order of price, as the case may be. The Issuer shall have the right to reject any or all bids or accept additional bids received from a TPM without assigning any reasons thereof. Alternatively, the ICPs and/or IMTNs could be placed privately via the Lead Arranger on a best effort basis to selected investors at a yield to be agreed between the Issuer and the investors. The IMTNs can also be placed out by the Lead Arranger on a best effort basis following a book building process. Such private placement and book running shall be subject to terms and conditions to be agreed between the Issuer and the Lead Arranger. The ICPs or IMTNs may also be issued in a bought deal based on terms and conditions to be mutually agreed upon between the Issuer and the primary subscribers. Issuance of the ICPs or IMTNs under the programme shall be in accordance with the FAST Rules, RENTAS and shall be prescribed under the Scripless Securities Trading System ( SSTS ) maintained by BNM, subject to such exemptions (if any) granted from time to time. (n) Selling restriction, including tradability (i.e. tradable or nontradable) : Selling Restrictions at Issuance The Sukuk Musharakah shall not be offered, sold or delivered, 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 or in the circumstances specified under: (i) (ii) Schedule 6 (or Section 229(1)(b)); or Schedule 7 (or Section 230(1)(b)), read together with Schedule 9 (or Section 257(3)) of the Capital Market and Services Act 2007 ( CMSA ), as amended from time to time. Selling Restrictions Thereafter The Sukuk Musharakah shall not be offered, sold or 7

8 delivered, 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 or in the circumstances specified under: Schedule 6 (or Section 229(1)(b)) read together with Schedule 9 (or Section 257(3)) of the CMSA, as amended from time to time. (o) Listing Status : The Sukuk Musharakah will not be listed on the Bursa Malaysia Securities Berhad or any other stock exchange. (p) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) : None. (q) Conditions Precedent : To include but not limited to the following (all have to be in form and substance acceptable to the Lead Manager): Conditions Precedent for the first issue: A (i) (ii) B (i) Main Documentation The Transaction Documents (as defined below) have been executed, stamped or endorsed as exempt from stamp duty, as applicable and presented for registration (if required). All relevant notices and acknowledgements (where applicable) shall have been made or received as the case may be. Issuer Certified true copies of the Certificate of Incorporation, and the Memorandum and Articles of Association, of the Issuer. (ii) Certified true copies of the latest Forms 24, 44 and 49 of the Issuer. (iii) (iv) (v) (vi) (vii) C A certified true copy of board resolutions of the Issuer authorising, among others, the execution of the Transaction Documents. A list of the Issuer s authorised signatories and their respective specimen signatures. A report of the relevant company search of the Issuer. A report of the relevant winding up search or the relevant statutory declaration of the Issuer. Receipt of the comfort letter from the External Auditor addressed to the Issuer and to the Lead Arranger in respect of financial information as set out in the information memorandum. General (i) The approval from the SC and, where applicable, all other regulatory authorities and 8

9 (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) the compliance with all conditions of such approval. The ICPs and the IMTNs have received their respective requisite ratings as stated in this PTC. Evidence that all transaction fees, costs and expenses have been paid in full to the extent that the same are due and payable before the issuance. The Lead Manager has received from the Solicitors a legal opinion addressed to it advising with respect to, among others, the legality, validity and enforceability of the Transaction Documents and a confirmation addressed to the Lead Manager that all the conditions precedent have been fulfilled or waived. A confirmation from the Shariah Adviser that the structure of the Sukuk Programme and the Transaction Documents are in compliance with Shariah principles. Certification issued by the Issuer in the form prescribed by the Lead Manager confirming the accuracy of the representations and warranties contained in the Transaction Documents in all respect. Confirmation from the Issuer that no Dissolution Event (as defined below) has occurred and is continuing or shall occur if the relevant issuance is made. Completion of the due diligence carried out on the Issuer and its Material Subsidiaries (as defined below) to the satisfaction of the Lead Arranger and the Solicitors. Confirmation from the Issuer that all required consents from the Issuer s existing lenders for the Sukuk Programme (if applicable) have been obtained. Such other conditions precedent as advised by the Solicitors of the Lead Arranger and mutually agreed between the Issuer and the Lead Arranger. Conditions precedent for subsequent issue: (i) (ii) (iii) Confirmation from the Issuer to the Lead Manager that the representations and warranties still remain true and correct in all respects. Confirmation from the Issuer to the Lead Manager that no Dissolution Event has occurred and is continuing or shall occur if the relevant issuance is made. Such other conditions precedent as advised by the Solicitors of the Lead Arranger and mutually agreed between the Issuer and the Lead 9

10 10 Arranger. (r) Representations and Warranties : Representations and warranties will be included in the relevant Transaction Documents to the Sukuk Programme, and will include such representations and warranties customary and standard for a facility of this nature. Unless otherwise stated to the contrary, such representations and warranties shall be repeated on the closing date and the issue date. The representations and warranties shall include, but not limited to the following: (i) (ii) (iii) (iv) the Issuer is a company with limited liability duly incorporated and validly existing under the laws of Malaysia, has full power to carry on its business and to own its property and assets, and has full beneficial ownership of all its property and assets; the memorandum and articles of association of the Issuer incorporate provisions which authorise, and all necessary corporate and other relevant actions have been taken to authorise, and all relevant consents and approvals of any administrative, governmental or other authority or body in Malaysia have been duly obtained and are in full force and effect which are required to authorise the Issuer to execute and deliver and perform the transactions contemplated in the Transaction Documents in accordance with their terms and/or are in connection with the legality, validity and enforceability of the Transaction Documents; neither the execution and delivery of any of the Transaction Documents nor the performance of any of the transactions contemplated by the Transaction Documents did or does as at the date this representation and warranty is made or repeated (a) contravene or constitute a default under any provision contained in any agreement, instrument, law, ordinance, decree, judgment, order, rule, regulation, licence, permit or consent by which the Issuer or any of its assets is bound or which is applicable to the Issuer or any of its assets, (b) cause any limitation on the Issuer or the powers of its directors, whether imposed by or contained in its memorandum and articles of association or in any agreement, instrument, law, ordinance, decree, order, rule, regulation, judgment or otherwise, to be exceeded, or (c) cause the creation or imposition of any security interest or restriction of any nature on any of the Issuer s assets; each of the Transaction Documents is or will when executed and/or issued, as the case may be, be in full force and effect and constitutes, or will when executed or issued, as the case may be, constitute, valid and legally binding

11 obligations of the Issuer and enforceable in accordance with its terms; (v) no litigation, arbitration or administrative proceeding or claim which might by itself or together with any other such proceedings or claims which have or might have or would reasonably be expected to have Material Adverse Affect on the Issuer or any Material Subsidiary (as defined below) is presently in progress or pending or, threatened against the Issuer or any Material Subsidiary or any of its or their assets; (vi) (vii) (viii) (ix) (x) the Issuer is unaware and has no reason to believe that an event has occurred which constitutes, or which with the giving of notice and/or the lapse of time and/or a relevant determination would constitute, a contravention of, or default under, any agreement or instrument by which the Issuer, any Material Subsidiary, or any asset of the Issuer or any Material Subsidiary are bound or affected, being a contravention or default have or might have or which would reasonably be expected to have a Material Adverse Effect; the Issuer has disclosed in writing or through such disclosures which have been documented or minuted prior to the date of the programme agreement to the Lead Arranger and/or the Facility Agent all facts relating to the Issuer knows or should reasonably know and which are material for disclosure to the Trustee, the Lead Arranger and the Facility Agent in the context of the Transaction Documents; any factual information provided by or on behalf of the Issuer in connection with the Sukuk Programme was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated, is not misleading in any respect and there is no material omission in respect thereof and any financial projections or forecasts provided in connection with the Sukuk Programme have been prepared on the basis of recent historical information and on the basis of reasonable assumptions; the audited financial statements of the Issuer give a true and fair view of and represent the Issuer financial condition and operations during the relevant financial year save to the extent expressly disclosed in such financial statements and there has been no material adverse change in its assets, business or financial condition since 31 December 2011; none of the Issuer or its assets, revenues or properties have any right of immunity from suit, execution, attachment or other legal process on the grounds of sovereignty or otherwise in 11

12 (xi) (xii) respect of any action or proceeding relating in any way to the Transaction Documents; the Issuer and the Material Subsidiaries are in compliance with any applicable laws and regulations; save for any internal corporate reorganisation of the Group undertaken in the normal course of business, neither the Issuer nor any of the Material Subsidiaries has taken any corporate action nor have any other steps been taken or legal proceedings started or threatened in writing against the Issuer or any Material Subsidiary for its or their bankruptcy, windingup, dissolution, external administration or reorganisation (whether by voluntary arrangement, scheme of arrangement or otherwise) or for the appointment of a receiver, administrator, administrative receiver, conservator, custodian, trustee or similar officer of it or of any or all of its or their assets, revenues or properties; (xiii) all licences, consents, examinations, clearances, filings, registrations and authorisations which are necessary to enable the Issuer and any of the Material Subsidiaries to own their respective assets and properties and carry on their respective businesses have been obtained and are in full force and effect; (xiv) the Issuer s payment obligations under the Transaction Documents rank at least pari passu with the present and future claims of all of its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally; (xv) the Issuer and each other member of the Group, any of their respective directors, officers, agents or any affiliate of the Issuer or any other member of the Group is not subject to any sanctions administered by the Office of Foreign Assets Control ( OFAC ) by regulation codified in Subtitle B, Chapter V of Title 31, U.S. Code of Federal Regulation, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty s Treasury or any other relevant sanctions (collectively, Sanctions ). For the purpose of this subclause, reference to "affiliate" shall mean a person, organization, or establishment associated with another as a subordinate, subsidiary, or member; (xvi) the capital and proceeds raised from the Sukuk Programme will not directly or indirectly be lent contributed or otherwise made available to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any such Sanction; 12

13 (s) Events of Default (or enforcement event, where applicable) (xvii) neither the Issuer, any other member of the Group nor any of their respective directors, officers, agents or representatives (each acting in such capacity) has violated or is in violation of any provision of the laws of the United States of America (including but not limited to the Foreign Corrupt Practices Act 1977, as amended and U.S. Export Administration Regulations, as amended), Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law or regulation (collectively, Anti-bribery Laws ); (xviii) the operations of the Issuer and each other member of the Group are and have been conducted at all times in compliance with applicable anti-money laundering laws and statutes of all jurisdictions, including, without limitation, the U.S. anti-money laundering laws, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental or regulatory agency (collectively, the Money Laundering Laws ); and no action, suit or proceeding by or before any court of governmental or regulatory agency, authority or body or any arbitrator involving the Issuer or any member of the Group with respect to the Money Laundering Laws is pending or, to the best knowledge of the Issuer or such member of the Group, after due and careful enquiry, threatened; and (xix) any other representations and warranties as advised by the legal counsel of the Lead Arranger and mutually agreed between the Issuer and the Lead Arranger. : Events of Default/Dissolution Events (the Dissolution Events ) to include but not limited to the following: (i) (ii) (iii) the Issuer fails to pay any amount due from it under any of the Transaction Documents on the due date or, if so payable, on demand; any representation or warranty made or given by the Issuer under the Transaction Documents or which is contained in any certificate, document or statement furnished at any time pursuant to the terms of the Sukuk Musharakah and/or any of the Transaction Documents proves to have been incorrect or misleading in any respect on or as of the date made or given or deemed made or given, and in the case of a failure which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the failure within a period of thirty (30) days after the Issuer became aware or having been notified by the Trustee of the failure; the Issuer fails to observe or perform its obligations under any of the Transaction Documents or the Sukuk Musharakah or under 13

14 (iv) (v) (vi) (vii) (viii) any undertaking or arrangement entered into in connection therewith other than an obligation of the type referred to in paragraph (i) above, and in the case of a failure which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the failure within a period of thirty (30) days after the Issuer became aware or having been notified by the Trustee of the failure; there has been a breach by the Issuer of any obligation under any of the Issuer s existing contractual obligations which have or might have or would reasonably be expected to have a Material Adverse Effect and, if in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the breach within a period of thirty (30) days after the Issuer became aware or having been notified by the Trustee of the breach; any indebtedness for borrowed moneys of the Issuer or any Material Subsidiary becomes due or payable or capable of being declared due or payable prior to its stated maturity or any guarantee or similar obligations of the Issuer or any Material Subsidiary is not discharged at maturity or when called and such declaration of indebtedness being due or payable or such call on the guarantee or similar obligations is not being contested in good faith and discharged by the Issuer or such Material Subsidiary within thirty (30) days from the date of such declaration or call, or the Issuer or any Material Subsidiary goes into default under, or commits a breach of, any agreement or instrument relating to any such indebtedness, guarantee or other obligations, or any security created to secure such indebtedness becomes enforceable; an encumbrancer takes possession of, or a trustee, receiver, receiver and manager or similar officer is appointed in respect of the whole or substantial part of the business or assets of the Issuer or any Material Subsidiary, or distress, legal process, sequestration or any form of execution is levied or enforced or sued out against the Issuer or any Material Subsidiary, or any security interest which may for the time being affect any of the assets of the Issuer or any Material Subsidiary becomes enforceable; the Issuer or any Material Subsidiary fails to satisfy any judgement passed against it by any court of competent jurisdiction and no appeal against such judgement or no application for a stay of execution has been made to any appropriate appellate court within the time prescribed by law or such appeal or application for a stay of execution has been dismissed; any step is taken for the winding up, dissolution 14

15 (ix) (x) (xi) (xii) or liquidation of the Issuer or any Material Subsidiary or a resolution is passed for the winding up of the Issuer or any Material Subsidiary or a petition for winding up is presented against the Issuer or any Material Subsidiary and the Issuer or such Material Subsidiary (as the case may be) has not taken any action in good faith to set aside such petition within thirty (30) days from the date of service of such winding up petition or a winding up order has been made against the Issuer or such Material Subsidiary; the Issuer or any Material Subsidiary convenes a meeting of their respective creditors or proposes or makes any arrangement including any scheme of arrangement or composition or begins negotiations with their respective creditors, or takes any proceedings or other steps, with a view to a rescheduling or deferral of all or any part of their respective indebtedness or a moratorium is agreed or declared by a court of competent jurisdiction in respect of or affecting all or any part of their respective indebtedness or any assignment for the benefit of their respective creditors (other than for the purposes of and followed by a reconstruction previously approved in writing by the Trustee, unless during or following such reconstruction the Issuer or such Material Subsidiary becomes or is declared to be insolvent) or where a scheme of arrangement under section 176 of the Companies Act 1965 has been instituted against the Issuer or any Material Subsidiary incorporated in Malaysia or a similar provision to Section 176 of the Companies Act 1965 in other jurisdictions has been instituted against any Material Subsidiary which is not incorporated in Malaysia; where there is a revocation, withholding, invalidation or modification of any licence, authorisation, approval or consent of the Issuer or any Material Subsidiary which have or might have or would reasonably be expected to have a Material Adverse Effect; save for such debts which are being contested in good faith by the Issuer and discharged within thirty (30) days from the date on which such debt is due, the Issuer or any Material Subsidiary is deemed unable to pay any of their respective debts or becomes unable to pay any of their respective debts as they fall due or suspends or threatens to suspend making payments with respect to all or any class or party of their respective debts; any creditor of the Issuer or any Material Subsidiary exercises a contractual right to take over the financial management of the Issuer or such Material Subsidiary; 15

16 (xiii) save for otherwise permitted under the provisions of the Transaction Documents, the Issuer or any Material Subsidiary changes or threatens to change the nature or scope of a substantial part their respective business, or suspends or threatens to suspend or cease or threatens to cease the operation of a substantial part of their respective business which it now conducts directly or indirectly; (xiv) any litigation, arbitration or administrative proceeding or claim by itself or together with any other such proceedings or claims which have or might have or would reasonably be expected to have Material Adverse Effect on the Issuer or any Material Subsidiary is presently in progress or pending or, threatened against the Issuer or any Material Subsidiary or any of its or their assets; (xv) at any time any of the provisions of the Transaction Documents is or becomes illegal, void, voidable or unenforceable; (xvi) the Issuer repudiates any of the Transaction Documents or the Issuer does or causes to be done any act or thing evidencing an intention to repudiate any of the Transaction Documents; (xvii) the whole or a substantial part of the assets, undertakings, rights or revenue of the Issuer or any Material Subsidiary are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any governmental body; (xviii) any event or events has or have occurred or a situation exists which in the opinion of the Trustee has or might have or would be reasonably expected to have a Material Adverse Effect, and in the case of the occurrence of such event or situation which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy it within a period of thirty (30) days after the Issuer became aware or having been notified by the Trustee of the event or situation; (xix) it is or will become unlawful under the laws of Malaysia or by the laws of any applicable jurisdiction for the Issuer to perform or comply with its obligations under any Transaction Documents; or (xx) such other event as may be advised by the Solicitors. Upon the declaration of a Dissolution Event, the Trustee may or shall (if directed to do so by a special resolution of the Sukukholders and subject to it being indemnified to its satisfaction) declare that: (i) a Dissolution Event has occurred; (ii) exercise its rights under the Purchase Undertaking and declare that the Exercise Price payable under the Purchase 16

17 Undertaking and all other sums payable under the Sukuk Musharakah and the Transaction Documents are immediately due and payable in full in accordance with the terms of the relevant Transaction Documents. Upon payment of the Exercise Price by the Issuer, the Musharakah Venture shall be dissolved and the Sukuk Musharakah held by the Sukukholders shall be cancelled. (t) Covenants : Information Covenants To include but not limited to the following: (i) (ii) the Issuer shall provide to the Trustee at least on an annual basis, a certificate confirming that it has complied with all its obligations under the Transaction Documents and the terms and conditions of the Sukuk Programme and that there does not exist or had not existed, from the date the Sukuk Musharakah were issued, any Dissolution Event, and if such is not the case, to specify the same; the Issuer shall deliver to the Trustee the following: (a) (b) (c) as soon as they become available (and in any event within one hundred and eighty (180) days after the end of each of its financial years) copies of its consolidated financial statements for that year which shall contain the income statements and balance sheets of the Issuer and which are audited and certified without qualification by a reputable firm of independent certified public accountants; as soon as they become available (and in any event within ninety (90) days after the end of the first half of its financial year) copies of its unaudited half yearly consolidated financial statements for that period which shall contain the income statements and balance sheets of the Issuer which are duly certified by any one of its directors; promptly, such additional financial or other information relating to the Issuer s business and its operations as the Trustee may from time to time reasonably request; (d) promptly, such additional or other information as the Trustee may from time to time reasonably request in order to discharge its duties and obligations as trustee to the extent permitted by law; (e) promptly, all notices or other documents received by the Issuer from any of its shareholders or its creditors which 17

18 (iii) (iv) (v) (f) contents may materially and adversely affect the interests of the Sukukholders, and a copy of all documents dispatched by the Issuer to its shareholders (or any class of them) in their capacity as shareholders or its creditors generally at the same time as these documents are dispatched to these shareholders or creditors; and promptly, any other accounts, report, notice, statement or circular issued to shareholders which the Trustee shall at its discretion circulate the accounts, report, notice, statement or circular to the registered Sukukholders who fall within Schedules 6 and 7 of the CMSA; the Issuer shall promptly notify the Trustee of the occurrence of any event that has caused or could cause (aa) any amount secured or payable under the Sukuk Musharakah to become immediately payable; or (bb) the Sukuk Musharakah to become immediately enforceable; or (cc) any other right or remedy under the terms and conditions of the Transaction Documents or the Sukuk Musharakah to become immediately enforceable; the Issuer shall immediately notify the Trustee when the Issuer become aware: (a) (b) (c) (d) (e) (f) of any circumstance that has occurred that would materially prejudice the Issuer; of any change in its board of directors and/or substantial shareholders; of any substantial change in the nature of its business; of any change in its withholding tax position or taxing jurisdiction; of any change in the utilisation of proceeds from the Sukuk Musharakah where the information memorandum or any agreement entered into in connection with the issue, offer or invitation sets out a specific purpose for which proceeds are to be utilised; of any other matter which may materially prejudice the interests of the Sukukholders; the Issuer shall promptly notify the Trustee of any change in its condition (financial or otherwise) and of any litigation or other proceedings of any nature whatsoever being threatened or initiated against the Issuer before any court or tribunal or administrative agency which would reasonably be expected to have a material adverse effect on the business or 18

19 (vi) (vii) condition (financial or otherwise) or results of the operations of the Issuer or the ability of the Issuer to perform any of its obligations under any of the Transaction Documents; the Issuer shall promptly give notice to the Trustee of the occurrence of any Dissolution Event or any event which, upon the giving of notice and/or lapse of time and/or the issue of a certificate and/or the fulfilment of the relevant requirement as contemplated under the relevant Transaction Document would constitute a Dissolution Event ( Potential Dissolution Event ) forthwith upon becoming aware thereof, and it shall take all reasonable steps and/or such other steps as may reasonably be requested by the Trustee to remedy and/or mitigate the effect of the Dissolution Event or the Potential Dissolution Event; any other covenants as advised by the legal counsel of the Lead Arranger and mutually agreed between the Issuer and the Lead Arranger. Financial Covenants To include the financial covenants stated below. Testing and certification of such financial covenants shall be carried out by the Issuer on an annual basis on each financial year end date of the Issuer. Notwithstanding the foregoing, in the event there is the occurrence of any event that has a Material Adverse Effect (including but not limited to the occurrence of an Event of Default) the Issuer shall upon being requested by the Trustee, perform such further testing and certification as may be requested by the Trustee. Debt to EBITDA Ratio Throughout the tenor of the Sukuk Programme, the Issuer shall ensure that the Debt to EBITDA of the Group shall be as follows: (i) in respect of duration commencing on and from the first (1 st ) issue of the Sukuk and ending on such date falling three (3) years thereafter (the Initial Period ), the Issuer shall ensure that the Debt to EBITDA of the Group shall be not more than six point five (6.5) times; and (ii) in respect of the duration commencing on and from the day following the expiry of the Initial Period and throughout the remaining tenor of the Sukuk Programme, the Issuer shall ensure that the Debt to EBITDA of the Group shall be not more than five (5) times. Gearing Ratio Throughout the tenor of the Sukuk Programme, the Issuer shall ensure that the Debt/Equity Ratio of the Group shall be not more than one point three five (1.35) times. 19

20 Debt/Equity Ratio means the ratio of Debt to Equity of the Group. Debt means includes without limitation the following: (i) (ii) (iii) (iv) (v) the principal amount for the time being owing by any member of the Group in respect of any indebtedness, loan, overdraft (or other similar indebtedness), financing raised under Islamic principles or otherwise, debenture, debenture stock, credit facilities, borrowing, long term debt instruments (including but not limited to the Sukuk Musharakah, bonds, promissory notes and loan stock) or any other instrument creating or evidencing the Group s borrowing but so that in the case of a debenture, debenture stock, bond or other instruments created or evidencing collateral security for such member s borrowing, as the case may be, the amount to be taken into account shall be the principal amount thereof or the amount for the time being outstanding of the borrowing or indebtedness collaterally secured whichever is the lesser; in the case of a counter indemnity with respect to any guarantee facility provided to any member of the Group and in relation to advances made to any member of the Group the amount to be taken into account shall be the principal amount of the advances made to such member of the Group and not repaid; amounts raised by any member of the Group by acceptance under any acceptance credit opened on its behalf and the principal amount recoverable from such member of the Group in respect of bills or receivables discounted; amounts raised by any member of the Group by factoring its hire-purchase receivables with recourse and financial leases; net exposure determined on a marked to market basis under any derivatives transactions entered by any member of the Group, but excludes (1) the double counting of any liability which might otherwise be included as a result of this definition; (2) all loans and/or advances from the Issuer s shareholders that remains outstanding and which are subordinated; (3) any contingent liability in respect of a guarantee(s), indemnity(ies), performance bond(s) or any other instrument(s) of similar nature issued or provided by the Issuer or any member of the Group to any party to secure any obligation or performance of any member of the Group; (4) the value of any contingent liability in respect of guarantee(s) or indemnity(ies) provided by the Issuer to any party to secure obligations of a joint venture company or a joint venture vehicle which the Issuer is a party to that are being counter guaranteed or counter indemnified by a third (3 rd ) party with at least similar 20

21 financial standing or corporate rating (if any) as the Issuer; and (5) inter-company advances between the members of the Group. For the avoidance of any doubt and subject to paragraph (4) above, any contingent liability in respect of any guarantee(s), indemnity(ies), performance bond(s) or any other instrument(s) of similar nature issued or provided by any member of the Group for the benefit of any person or any corporation or any company which is not a member of the Group shall be taken into account for the purposes of determining the then prevailing Debt. EBITDA means for any period, the sum for the Group of the following: (i) (ii) net operating income (calculated before taxes, interest and/or profit (where Islamic financing is concerned) expense) for such period, plus;(b) depreciation, amortisation (to the extent deducted in determining net operating income) and the fair value of such other non-cashflow adjustments as may be agreed between the Issuer and the [Trustee] for such period, all as determined by reference to such available information provided in the then latest audited consolidated financial statements of the Issuer prepared consistently in accordance with approved accounting standards in Malaysia in each case in relation to that financial year. Equity means the aggregate of: (a) (b) (c) the nominal ordinary and preference share capital of the Issuer for the time being issued and paid-up; the amounts standing in the capital and revenue reserve (including share premium accounts, capital redemption reserve fund, warrant reserve account, foreign exchange revaluation reserve and retained earnings or losses) of the Issuer; all loans and/or advances from the Issuer s shareholders that remain outstanding and which are subordinated, all as shown in the then latest consolidated audited financial statements of the Issuer prepared consistently in accordance with approved accounting standards in Malaysia but after (to the extent not taken into account for the purposes of (a), (b) and (c) above): (i) making such adjustment as may be appropriate in respect of any variation in the issued and paid-up share capital, the share premium account and any other capital and revenue reserve fund of the Issuer since the date of the latest audited financial statements (except for those accounted in (ii) below); (ii) deducting: 21

22 (aa) (bb) an amount equal to any distribution by the Issuer out of profits earned prior to the date of its latest audited balance sheet and which have been declared, recommended or made since that date except so far as provided for in such balance sheet; an appropriate amount for any tax which is payable on the actual realisation of any land or buildings of the Issuer at the amounts which they have been realized. Positive Covenants To include but not limited to the following: (i) (ii) (iii) (iv) the Issuer shall (and shall ensure that each member of the Group will) maintain in full force and effect all relevant authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) and will promptly obtain any further authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) which is or may become necessary to enable it to own its assets, to carry on its business or for the Issuer to enter into or perform its obligations under the Transaction Documents or to ensure the validity, enforceability, admissibility in evidence of the obligations of the Issuer or the priority or rights of the financiers under the Transaction Documents and the Issuer shall comply with the same; the Issuer shall at all times as soon as practicable execute all such further documents and do all such further acts reasonably necessary at any time or times to give further effect to the terms and conditions of the Transaction Documents; the Issuer shall (and shall ensure that each member of the Group will) exercise reasonable diligence in carrying out its business and affairs in a proper and efficient manner and in accordance with sound financial and commercial standards and practices; the Issuer shall promptly perform and carry out all its obligations under all the Transaction Documents (including but not limited to redeeming the Sukuk on the relevant Maturity Date(s) or any other date on which the Sukuk are due and payable) and ensure that it shall immediately notify the Trustee in the event that the Issuer is unable to fulfil or comply with any of the provisions of the Transaction Documents; (v) the Issuer shall prepare its consolidated financial statements on a basis consistently applied in accordance with approved accounting 22

23 (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) standards in Malaysia and those financial statements shall give a true and fair view of the results of the operations of the Issuer for the period to which the consolidated financial statements are made up and shall disclose or provide against all liabilities (actual or contingent) of the Issuer; the Issuer shall promptly comply with all applicable laws including the provisions of the CMSA and/or the notes, circulars, conditions or guidelines issued by SC from time to time; the Issuer shall keep proper books and accounts at all times and to provide the Trustee and any person appointed by the Trustee access to such books and accounts to the extent permitted by law; the Issuer shall maintain a paying agent in Malaysia at all times; the Issuer shall procure that the paying agent shall notify the Trustee in the event that the paying agent does not receive payment from the Issuer on the due dates as required under the Trust Deed and the terms and conditions of the Sukuk Musharakah; the Issuer shall cause and ensure that all and any advances by its shareholders and directors are subordinated to its liabilities under the Sukuk Programme; the Issuer shall (and shall ensure that each member of the Group will) maintain takaful/ conventional insurance necessary for business of such nature; the Issuer shall (and shall ensure that each member of the Group will) file all relevant tax returns and pay all taxes promptly upon the same becoming due except to the extent that taxes are being contested in good faith or an adequate reserve has been set aside with respect thereto; the Issuer shall (and shall ensure that each member of the Material Subsidiary will) use its best efforts to pursue claims against the relevant third parties; (xiv) the Issuer shall ensure that the terms and conditions of the Transaction Documents do not contain any matter which is inconsistent with the provisions of the information memorandum prepared pertaining to the Sukuk Programme; (xv) the Issuer shall ensure that the rating for the Sukuk Programme is made available throughout the tenure of the Sukuk Programme unless the rating is suspended or withdrawn by the Rating Agency, and in this regard, the Issuer undertakes and covenants to provide relevant information on continuous basis to the Rating 23