PROPOSED ESTABLISHMENT OF A PERPETUAL SUKUK PROGRAMME OF UP TO RM5.0 BILLION IN NOMINAL VALUE ( SUKUK PROGRAMME ) SUKUK DIAGRAM

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Bryan Collins
5 years ago
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1 Sukuk Wakalah transaction structure SUKUK DIAGRAM 7. Purchase Undertaking Sukuk Trustee (acting on behalf of Sukukholders) 1. Appoint as Wakeel 2 (a). Issue Sukuk Wakalah 2 (b). Proceeds 8. Sale Undertaking (Wakeel/Issuer/ Ijarah Buyer/ Lessor/ Seller) 6. Substitution of Ijarah 3. Purchase Ijarah 4. Lease Ijarah 4. Rental 10. Exercise Price & Deferred Sale Price (Ijarah Seller/ Lessee/ Obligor) Buyer 3. Hibah Ijarah 10. Hibah Ijarah Related Corporation(s) 9. Periodic Distribution Amount 5 (a). Purchase Order 10. Redemption of Sukuk Wakalah 5 (b). Purchase Commodities on spot Purchase Price 5 (c). Sell Commodities at Deferred Sale Price Selling Price= Purchase Price 5 (d). Sell commodities on spot Supplier (s) on BSAS/ Broker A BMIS/ Broker B 1

2 The issuance of each tranche of the Sukuk Wakalah shall be effected as follows: Step Description 1. Pursuant to a Wakalah agreement entered between the sukuk trustee for the Sukuk Programme (the Sukuk Trustee ) (acting on behalf of the holders of the Sukuk Wakalah (the Sukukholders )) and Sunway ( Wakalah Agreement ), the Sukuk Trustee shall appoint Sunway as its agent ( Wakeel ) to perform duties in respect of the Wakalah Portfolio (as defined below). The Wakeel shall manage the Wakalah Portfolio, including investment, collection and distribution of income generated from the Wakalah Portfolio and monitoring of compliance of the Wakalah Portfolio with the Minimum Requirements (as defined below) at all times. The Shariah-compliant Wakalah portfolio ( Wakalah Portfolio ) shall comprise a combination of: (a) the Ijarah (as defined below); (b) the Murabahah Investment (as defined below); and (c) if applicable, the Investment (as defined below). The Shariah-compliant leasable assets ( Ijarah ) and Investment (if applicable) shall represent a minimum of 33% of the value of the Wakalah Portfolio ( Minimum Requirements ). For the avoidance of doubt, the above ratio of at least 33% of the value of the Wakalah Portfolio is only applicable at the point of initial investment for the Sukuk Wakalah and does not need to be maintained throughout the tenure of the Sukuk Wakalah. 2. (a) Sunway as Issuer shall issue Sukuk Wakalah to the Sukukholders in exchange of the subscription amount paid by the Sukukholders ( Sukuk Proceeds ). (b) Pursuant to the Wakalah Agreement, the Wakeel shall be authorised to utilise the proceeds for investment in the Wakalah Portfolio on behalf of the Sukuk Trustee (for the benefit of the Sukukholders). The Wakeel shall hold the Wakalah Portfolio on trust for the benefit of the Sukukholders. The Sukuk Wakalah shall represent the Sukukholders proportionate undivided beneficial ownership and interest in the Wakalah Portfolio. 3. At the point of issuance of the Sukuk Wakalah, the Wakeel (as Ijarah Purchaser ) shall purchase the Ijarah from Sunway (as Ijarah Seller ) at the assets purchase price ( Purchase Price ) pursuant to a sale and purchase agreement ( Ijarah Sale and Purchase Agreement ), subject to the Minimum Requirements. In order to facilitate the Ijarah transaction, Sunway may source the Ijarah from its related corporation(s), who shall, first, transfer the Ijarah to Sunway by way of 2

3 hibah (gift). Upon completion of the hibah transfer, Sunway shall subsequently become the Ijarah Seller. 4. The Wakeel (as Lessor ) shall lease the Ijarah to Sunway (as Lessee ) at the rental (equivalent to the expected periodic distribution amount ( Expected Periodic Distribution Amount )) ( Rental ) pursuant to an Ijarah agreement ( Ijarah Agreement ) for a period of 99 years with option to renew upon expiry granted to the Lessee. The Lessor shall have no objection for the Lessee to sublease the Ijarah to other parties (as the case may be). The Lessee shall have the option to terminate the lease by issuing a notice to the Lessor, subject to the terms of the Ijarah Agreement. The Wakeel will be responsible for, among others, major maintenance and/or structural repair and to procure the takaful/insurance coverage in respect of the Ijarah. The costs and expenses related to the Wakeel s responsibilities shall be referred to as the Wakalah Services Charge Amount, which shall be reimbursed by the Sukuk Trustee to the Wakeel upon the payment of the Exercise Price. The Wakeel shall also ensure that the takaful/insurance is for a covered/insured amount at all times and shall be responsible for the related payment of the relevant takaful contribution or insurance premium. 5. The remaining Sukuk Proceeds shall be utilised for investment in the commodity murabahah investment ( Murabahah Investment ): (a) Pursuant to the Murabahah Investment agreement ( Murabahah Investment Agreement ), Sunway (as Buyer ) shall issue to the Wakeel and Sukuk Trustee a purchase order ( Purchase Order ) with an undertaking to purchase the Shariah-compliant Commodities from the Wakeel (as Seller ) at the Deferred Sale Price (as defined below). The parties to the Murabahah Investment Agreement are: (i) (ii) Sunway as Buyer; and Wakeel as Seller (b) (c) (d) The Wakeel, via a commodity trading participant, shall purchase on spot basis the Shariah-compliant Commodities from a commodity supplier(s) at Bursa Suq Al-Sila ( BSAS ) or a commodity broker acceptable to the Shariah Adviser ( Broker A ) at the commodity purchase price equivalent to such remaining proceeds of the Sukuk Wakalah ( Purchase Price ). The Seller shall sell the Shariah-compliant Commodities to the Buyer for a deferred sale price equivalent to Purchase Price plus the profit margin ( Deferred Sale Price ) payable on a deferred basis upon the terms of a sale and purchase agreement ( Sale and Purchase Agreement"). The Buyer, via a commodity trading participant, may subsequently sell the Shariah-compliant Commodities to Bursa Malaysia 3

4 Islamic Services ( BMIS ) or a commodity broker other than Broker A acceptable to the Shariah Adviser ( Broker B ) on spot basis for an amount equal to the Purchase Price. 6. The Wakeel shall have the right to substitute from time to time (i) throughout the tenure of the Sukuk Wakalah at the option of the Wakeel or (ii) upon the occurrence of a Partial Loss Event (as defined herein) or Total Loss Event (as defined herein) or (iii) in the event the Investment become Shariah non-compliant, via an exchange agreement, the Ijarah or the Investment (as the case may be) with qualified asset(s) that is/are Shariah-compliant and approved by the Shariah Adviser. The Wakeel would acquire the replacement assets from the Issuer who may source such replacement assets from its related corporation(s) (via Hibah). The replacement assets shall form part of the Wakalah Portfolio. Following such substitution, the value of the Ijarah (including the replacement assets) and the Investment (if applicable) shall not be less than the Minimum Requirements. For avoidance of doubt, in the event the Investment become Shariah non-compliant, the Investment shall be substituted with Shariah-compliant Investment within an agreed timeframe. The value of the replacement assets following the substitution of the Ijarah or the Investment would be at least equivalent to the said Ijarah or the Investment. In the event the Ijarah are affected by a Partial Loss Event or Total Loss Event, proceeds of the takaful/insurance claim over the affected Ijarah shall be utilised for the replacement or repair of the affected Ijarah. The Wakeel shall irrevocably and unconditionally undertake to make good the difference if the proceeds of takaful/insurance are insufficient to repair the affected Ijarah and if the affected Ijarah are to be replaced, to ensure that following such replacement pursuant to the Partial Loss Event or the Total Loss Event (as the case may be), the value of the Ijarah (including the replacement assets) shall not be less than the Minimum Requirements. The cost to make good the difference shall be reimbursed by the Sukuk Trustee to the Wakeel upon the payment of the Exercise Price. Any excess from the takaful/insurance proceeds over the amount required to replace or repair the affected Ijarah shall be retained as incentive fee by the Wakeel. For the avoidance of doubt, the Ijarah Agreement will not be terminated. 7. Sunway (as Obligor ) shall grant a purchase undertaking ( Purchase Undertaking ) to the Wakeel and the Sukuk Trustee, under which the Obligor shall purchase (a) the Ijarah and the Investment (if applicable) from the Wakeel at the relevant Exercise Price by entering into a sale agreement ( Sale Agreement ) upon (i) an Enforcement Event (as defined in (Events of default or enforcement events, where applicable, including recourse available to investors) paragraph) ( Enforcement Event Purchase Undertaking ) and (ii) occurrence of Profit Shortfall ( Shortfall Purchase Undertaking ) and (b) the Additional (as defined below) or the Investment (if applicable) (i) on the next Periodic Distribution Date (as defined below) upon any deferral of, all or part of, the Expected Periodic Distribution Amount or Arrears of Deferred Periodic Distribution or (ii) within one (1) month from the occurrence of an event under the Dividend and Capital Pusher, at the Additional Asset Price by entering into a Sale Agreement ( Deferral Purchase Undertaking ). 4

5 8. The Wakeel shall grant a sale undertaking ( Sale Undertaking ) to the Issuer, under which the Wakeel shall sell (i) the Ijarah and the Investment (if applicable) to the Issuer at the relevant Exercise Price by entering into a Sale Agreement upon the Issuer exercising its rights to redeem the Sukuk Wakalah pursuant to the Redemption Events (including Optional Redemption) (as defined in (Redemption and Purchase) paragraph of the section entitled (Other Terms and Conditions) paragraph) ( Redemption Event Sale Undertaking ) and (ii) the relevant Additional or the Investment (if applicable) to the Issuer at the Additional Price by entering into a Sale Agreement upon the Issuer electing to pay any Deferred Periodic Distribution or Arrears of Deferred Periodic Distribution (as defined in (Periodic Distribution Deferral Cumulative Deferral) paragraph of the section entitled (Other Terms and Conditions)) (as the case may be) ( Deferral Sale Undertaking ). 9. On each periodic distribution date ( Periodic Distribution Date ), the Wakeel shall distribute any income generated from the Wakalah Portfolio (including income from the Ijarah and the Investment (if applicable)) ( Portfolio Income ) up to the Expected Periodic Distribution Amount to the Sukukholders in the form of periodic distributions. As agreed by the Sukukholders, the Issuer may at its sole discretion choose to make payment of all or some of an Expected Periodic Distribution Amount on the Periodic Distribution Date or choose to defer such payment by giving notice to the Sukukholders. 10. Upon redemption of the Sukuk Wakalah pursuant to Enforcement Events or on the date of declaration of a Redemption Event, the Obligor shall purchase from the Wakeel pursuant to the exercise of the Purchase Undertaking or the Wakeel shall sell to the Issuer pursuant to the exercise of the Redemption Event Sale Undertaking (as the case may be) the Ijarah and the Investment (if applicable) at the relevant Exercise Price by entering into the Sale Agreement. The Buyer shall also pay the Deferred Sale Price upon redemption of the Sukuk Wakalah pursuant to Enforcement Events or on the date of declaration of a Redemption Event. Pursuant to the exercise of the Purchase Undertaking by the Sukuk Trustee (acting on behalf of the Sukukholders) upon a Redemption Event or upon an Enforcement Event, whichever is earlier, and purchase of the Ijarah by the Obligor from the Sukuk Trustee, Sunway may transfer the Ijarah to the related corporation(s) where Sunway source the Ijarah from by way of a second hibah (gift) (if applicable). Proceeds from the Wakalah Portfolio including the Exercise Price and the Deferred Sale Price shall be paid to the Sukukholders to redeem the outstanding Sukuk Wakalah. Following the occurrence of an Enforcement Event or a Redemption Event, the Sukuk Wakalah will be redeemed at the redemption sum which equals to the relevant Exercise Price and Deferred Sale Price. Upon full payment to the Sukukholders, the Sukuk Wakalah will then be cancelled. 5

Flow chart of the description of the transaction structure. Green SRI Sukuk Wakalah transaction structure

Flow chart of the description of the transaction structure Green SRI Sukuk Wakalah transaction structure 1(b). Issue Green SRI Sukuk Wakalah 4. Undertaking (Exercise Price) (Issuer/ Investment Wakeel/