PRINCIPAL TERMS AND CONDITIONS

Transcription

1 PRINCIPAL TERMS AND CONDITIONS Issuer : Sejingkat Power Corporation Sdn Bhd ( Sejingkat Power ) Facility : Al-Bai Bithaman Ajil ( deferred payment sale ) with Islamic Debt Securities Issuance Facility ( BaIDS )(hereinafter referred to as the Bonds ). Under the Syariah concept of Al-Bai Bithaman Ajil, the Bondholders shall first purchase the identified assets (the "Assets") of the Issuer at the price equivalent to the Nominal Value of the Bonds (the "Purchase Price") and sell them back to the Issuer at the price equivalent to the Purchase Price together with the margin of profit (the "Selling Price"). The payment of the Selling Price shall be made on a deferred payment basis in accordance with the agreed redemption schedule. Purpose : Proceeds of the Bonds shall be applied towards refinancing of an existing shareholder s advance for the design, construction and operation of a coal-fired power plant with a total installed capacity of 100 MW in Sejingkat, Sarawak, bond issuance expenses and working capital. Security : To include but not limited to:! Charge in escrow over the land known as Lot 885, Block 5, Muara Tebas Land District. In the event the land on which the current project site and its ancillary facilities are located is being subdivided and separate title pursuant thereto has been issued, the subdivided land shall be charged to the Security Trustee immediately upon discharge of the existing charge.! Assignment of all rights, benefits and titles of Sejingkat Power under its Project documents, including the Electricity Generating Licence, the Power Purchase Agreement with SESCo, the Coal Supply Agreement with Global Minerals, insurance policies and bank accounts;! Memorandum of Charge over Designated Accounts and assignment of the Issuer s future rights, benefits and titles of the monies standing to the credit of the Designated Accounts; and Arranged by: Utama Merchant Bank Berhad Page 1

2 ! Debenture creating a fixed and floating charge over Sejingkat Power s present and future assets. Arranger and Manager : Utama Merchant Bank Berhad Primary Subscriber : Utama Merchant Bank Berhad Facility Agent/ Monitoring Agent for Designated Accounts : Utama Merchant Bank Berhad Solicitors : Messrs Hisham, Sobri and Kadir Syariah Adviser : Dr Mohd Daud bin Bakar, Associate Professor, International Islamic University Malaysia Depository / Paying Agent : Bank Negara Malaysia ( BNM ) under the Real Time Electronic Transfer of Funds and Securities ( RENTAS ). Trustee : Malaysian Trustees Berhad Subscribers : Financial institutions and / or other persons falling within any one category of the persons falling within the ambit of Schedule 2 of the Securities Commission Act 1993 ( SCA ). Nominal Value : Ringgit Malaysia One Hundred and Ninety Five Million (RM 195,000,000.00) Purchase Price : The Primary Subscriber shall purchase the Assets at a Purchase Price to be determined between the Issuer and the Primary Subscriber. Selling Price : Equivalent to the Purchase Price and the Profit Portion. The Selling Price shall be evidenced by the issuance of noninterest bearing BaIDS Notes which represent the Issuer s unconditional obligation to settle the Selling Price. The nominal value of the Primary Notes for each tranche shall mature and be payable by the Issuer at the end of the tenor of the relevant tranche. Arranged by: Utama Merchant Bank Berhad Page 2

3 For every tranche, each Primary Note shall be attached with a number of Secondary Notes of a certain value, of semi-annual maturities commencing from the date of first issue, representing the profit portion of the Selling Price. Profit : The BaIDS profits shall accrue at the following Profit Rates based on the nominal amount of the BaIDS from the date of issue and shall be payable semi-annually in arrears with the last profit payment to be made on the relevant maturity date. Tranche Amount (RM million) Cash Profit (% p.a.) If the BaIDS are not issued after 29 December 2000, the Primary Subscriber reserves the right to revise the above profit rates. Any revision of the profit rates shall be mutually agreed between the Primary Subscriber and the Issuer. Tenor : Tranche Amount (RM million) Tenor (years) Repayment : Repayment of each Primary Note will be made in full upon maturity. Availability Period for the Facility : Upon completion of documentation and compliance with all conditions to the satisfaction of the Arranger, the Bonds shall be Arranged by: Utama Merchant Bank Berhad Page 3

4 issued in one lump sum within 3 months from the date of the Bond Issuance Facility Agreement. Designated Accounts : Sejingkat Power is required to open and maintain the following Designated Accounts with a Bank to be nominated by the Monitoring Agent as follows: 1. Project Account; 2. Finance Service Reserve Account; 3. Operations Account; and 4. Maintenance Reserve Account. The Project Account and Finance Service Reserve Account shall be operated by the Monitoring Agent as the joint signatory of the accounts. In the event of default by the Issuer, the Bondholders shall have priority in respect of any amount outstanding to the credit of the Designated Accounts. Project Account Sejingkat Power shall open a Project Account for the purpose of depositing all income excluding income earned from deposits. The funds in this account will be applied in the following manner: Year 1 The amount to be deposited into the Finance Service Reserve Account shall achieve a 3-month moving average of 30% of the income within a continuous 3-month period; and The balance of 70% of income shall be deposited into the Operations Account. Years 2 to 8 The amount to be deposited into the Finance Service Reserve Account shall achieve a 3-month moving average of 38% of the income within a continuous 3-month period; and The balance of 62% of income shall be deposited into the Operations Account. Year 9 The amount to be deposited into the Finance Service Reserve Account shall achieve a 3-month moving average of 28% of the income within a continuous 3-month period; and The balance of 72% of income shall be deposited into the Operations Account. Arranged by: Utama Merchant Bank Berhad Page 4

5 Contributions to the above two accounts shall be made on a monthly basis or when income from the sale of electricity is received. Contributions to the Finance Service Reserve Account shall have preference in the event of any shortfall in meeting finance service obligations. Finance Service Reserve Account Sejingkat Power shall open an income bearing Finance Service Reserve Account. The Finance Service Reserve Account shall maintain a minimum cash balance equivalent to the next profit obligation and one quarter of the redemption obligation of the relevant 12-month period ("Minimum Cash Reserve") prior to the issuance of the Bonds and throughout the tenor of the Bonds. Proportionate funds from the Project Account will be credited into the Finance Service Reserve Account until the total contribution meets the finance service obligation (Bond Profit and Bond Redemption) at the end of the relevant 12-month period while meeting the Minimum Cash Reserve of the next 12-month period. Sejingkat Power may only withdraw sums from the Finance Service Reserve Account for the following purposes: 1. Payment of Bond Profit and Bond Redemption and any other outstanding payment due under the Bond Issuance Facility Agreement in respect of the Bonds; or 2. Transfer to the Operations Account should the credit balance in the Finance Service Reserve Account exceed the aggregate the next 6 months profit obligation, the full redemption obligation of the relevant 12-month period, and the Minimum Cash Reserve requirement of the next 12-month period. Operations Account Sejingkat Power will open and operate an Operations Account for the purpose of paying all operating, management, maintenance and capital expenses for the power plant including: Sejingkat Power s staff salaries, wages and employment costs; Purchase of materials (inclusive of coal) and consumables for the operations and maintenance of the power plant; Arranged by: Utama Merchant Bank Berhad Page 5

6 Meeting the requirements of the Maintenance Reserve Account as per the Power Purchase Agreement; Contractors for the operations and maintenance of the power plant; Insurance premiums; Payment of fees for the Electricity Generating Licence; Land premium; Payment to CMEC for any balance due under the turnkey contract; Payment of taxes and other statutory creditors; Office overheads and costs; Consultants and advisors to Sejingkat Power; Other incidental costs for the operations and maintenance of the power plant; Directors fees; and Permitted Investments. The Operations Account will be funded by monthly contributions from the Project Account in the proportion set above. Funds in the Operations Account can be used for Permitted Distributions to Shareholders subject to meeting all Financial Covenants. Maintenance Reserve Account Sejingkat Power shall open a Maintenance Reserve Account to be used exclusively to pay for maintenance expenses in accordance with the terms in the Power Purchase Agreement. Form and Denomination : The Primary Notes will be represented by Global Certificates to be deposited with BNM. The Primary Notes will be issued in registered form and in denominations of RM 100, or such other denomination as may be decided at a later date and shall be prescribed under RENTAS maintained by BNM. Selling Restrictions : The Primary Notes may not be offered or sold, directly or indirectly, nor may any document or other material in connection herewith be distributed in Malaysia, to the public or any member of the public in Malaysia other than to persons specified under Schedule 2 of the SCA, and in accordance with the conditions of Schedule 2 of the SCA, or otherwise than pursuant to, and in accordance with the conditions of, any other applicable exemption invoked under Schedule 2 of the SCA. Affirmative Covenants : The Issuer shall, so long as the Bonds remain in effect or any amount is owing to the Bondholders under the Bonds, directly or Arranged by: Utama Merchant Bank Berhad Page 6

7 indirectly: (a) submit to the Trustee: unaudited quarterly financial statements within 90 days of each quarter duly certified by the General Manager and audited financial statements within 180 days of the end of the financial year (b) inform the Trustee of any material change in its Board of Directors and management team; (c) preserve and keep in force and effect all licences, approvals and rights necessary for the conduct of its business; (d) take out and maintain the necessary insurance policies and promptly notify the Trustee of any event which will or may give rise to any claim or right of action under the insurance policies; (e) promptly notify the Trustee of any claims against it which would have a material adverse effect on its ability to perform its obligations under the Bonds; and (f) provide Bondholders, via agreement with the Trustee, all reasonable access by prior appointment to the sites of the power producing facilities. Restrictive Covenants : The Issuer agrees that, so long as there is any indebtedness under the Bonds, it shall not, unless Bondholders otherwise consent in writing, which consent shall not be unreasonably withheld, obtain or procure additional borrowings or enter into any agreement to guarantee or indemnify a debt or give its properties as surety to a third party (excluding the indebtedness due to the Bondholders) unless the aggregate amount is below RM 2,000, or the purposes of the indebtedness fall under the category of Permitted Investments. Restrictive Covenant on Shareholders : Sarawak Enterprise Corporation Berhad ( SECB ) and Sarawak Electricity Supply Corporation Berhad ("SESCo") agree that, so long as there is any indebtedness under the Bonds, both SECB and SESCo shall not cause their respective shareholdings in the Issuer to reduce to below 30%. Financial Covenants : 1. So long as the Bonds remain outstanding, the Issuer will maintain:! A Debt to Equity ratio not exceeding 70:30 Arranged by: Utama Merchant Bank Berhad Page 7

8 ! A minimum Debt Service Coverage ratio of 1.6:1 Debt shall mean the short term and long term borrowings plus short term and long term issued private debt securities minus the amount placed in the finance service reserve account for redemption of the Bonds. Equity shall mean equity capital plus reserves minus revaluation reserves minus intangible assets plus advances from the holding/related companies. For this purpose, the Debt Service Cover Ratio is: (a) the after tax operating cashflow for the next 6 months plus cashflow from investing activities for the next 6 months plus opening cash balances, divided by (b) all debt service payments prorated over such period. Computation shall be: Debt Service Cover Ratio = After tax operating cash flow for the next 6 months + Cashflow from investing activities for the next 6 months + Opening cash balance 1/2*(profit + redemption + other payments for the relevant 12-month period) Permitted Investments : Sejingkat Power shall be allowed to make the following Permitted Investments subject to all Covenants being met: 1. Expansion and/or upgrading of the power plant and related facilities; 2. Development of new power plant; 3. Repurchase of the bonds. Permitted Distributions to Shareholders : Permitted Distributions to Shareholders are restricted to the following: 1. Dividends; 2. Interest on shareholders advances; and 3. Repayment of shareholders advances. Conditions Precedent : Documentation The bond issuance facility agreement, subscription agreement, trust deed, agency agreement, security documents, depository and paying agency agreement and all relevant documents have been Arranged by: Utama Merchant Bank Berhad Page 8

9 duly executed and stamped. The Issuer The following have been received by the Facility Agent: (a) Certified true copies of the Certificate of Incorporation, and the Memorandum and Articles of Association, of the Issuer (b) Certified true copies of the Forms 24 and 49 of the Issuer (c) A certified true copy of extract of the Issuer s board resolution authorising, among others, the execution of the subscription agreement, trust deed and the security documents (d) A list of the Issuer s authorised signatories and their respective specimen signatures (e) A report of the relevant company search Others 1. The Bonds shall be subject to the approval of the Securities Commission, and the operation and relevant terms and conditions of the Bonds shall at all times be governed by the guidelines issued and to be issued from time to time by the Securities Commission or any other authorities having jurisdiction over matters pertaining to the Bonds. 2. The Issuer is to open the Designated Accounts with a Bank to be appointed by the Monitoring Agent. 3. The Minimum Cash Reserve has been deposited into the Finance Service Reserve Account. 4. A minimum of RM 2.5 million has been deposited into the Maintenance Reserve Account. 5. A minimum rating of AA2 by RAM is to be obtained for the Bonds. 6. The Bonds shall be subject to such other terms and conditions standard of such facilities. 7. The Arranger has received legal opinion from its solicitors advising with respect to, among others, the legality, validity and enforceability of the subscription agreement, the trust deed and security documents and that all the conditions precedent have been fulfilled. Arranged by: Utama Merchant Bank Berhad Page 9

10 Mode of Issue : The Bonds shall be issued on a bought deal basis to UMBB as the Primary Subscriber. UMBB shall reserve the right of allocation during the subsequent sell down to the secondary subscribers. Listing Status : The Bonds will not be listed on the KLSE. Trading of Bonds : The Bonds shall be traded in the secondary market on a willing buyer-willing seller basis. Purchase and Cancellation : The Issuer may at any time purchase the Primary Notes in the open market at any price or by private treaty. The Primary Notes purchased will be cancelled and may not be resold or reissued. Mandatory Redemption : Unless previously redeemed, purchased or cancelled, the Primary Notes shall be redeemed at their respective face values on the respective maturity dates of the series. Expenses : All expenses including legal and rating fees, out-of-pocket, printing and other costs incurred in connection with the arrangement of the Bonds as well as charges imposed by Bank Negara Malaysia under the RENTAS billing charges shall be for the account of the Issuer. Taxes : All payments shall be made free and clear of all present and future taxes, duties, withholdings or other deductions whatsoever imposed by the Government or tax authority. Currency : Ringgit Malaysia Governing Laws : Syariah principles and the Laws of Malaysia Arranged by: Utama Merchant Bank Berhad Page 10