IslamicFinance.de

The Federal Land Development Authority is set to raise funds for its 37% stake acquisition in PT Eagle High Plantations Tbk via a mix of loans and sukuk issuance.
Sources familiar with the matter said that 50% of the acquisition figure of RM 2.26 bil would be financed through a loan with a major European banking group. The remaining funds will be raised through a sukuk issuance.
“The sukuk issuance could be announced as early as late January. The debt will be serviced by the cashflow generated by Felda Investment Corp’s (FIC) assets,” said a source. It is probable that the sukuk would come with an explicit government guarantee, given that Felda is a government-backed agency. This is because most institutional funds – which are the likeliest parties to subscribe to the sukuk – can only purchase high-rated bonds as part of their investment mandate. A guarantee would ensure that the bonds are rated at or close to the top investment grade.