KUCHING: Sarawak Consolidated Industries Bhd (SCIB) wholly-owned subsidiary SCIB Concrete Manufacturing Sdn Bhd (SCM) has accepted Islamic banking facilities amounting to RM48 million.
The loans were granted by Affin Islamic Bank Bhd.
The banking facilities include Tawarruq term financing-i of RM27 million, Tawarruq cash line-i of RM8 million, Islamic composite tradeline-i facilities of RM13 million, SCIB said in a filing with Bursa Malaysia.
The Tawarruq term financing-i is to be utilised to redeem 2-storey office building/spun piles factory and 2-storey office/concrete roofing tiles factory known as Lot 830, Block 7, Muara Tebas land district and 2-storey office building, 1-storey precast panels factory, 1-storey pipe plant building and other building known as Lot 1166, Block 8, Muara Tebas land district from RHB Bank Bhd. The balance of the facilities will be used as working capital. The tenure of the facilities is 180 months.
The Tawarruq cash line-i is also to be used as working capital requirement for 120 months and subject to yearly review.
For the RM13 million under Islamic composite tradeline-i facilities, it is to provide Shariah-compliant financing for the
purchase or import of business-related goods and raw materials, either domestically or internationally. This financing applies to transactions under letters of credit-i, inward bills for collection, open account and other collection methods involving both residents and non-residents.
The RM48 million banking facilities are secured by the following securities:
(a) Master facilities agreement to be executed between SCM and the bank to be stamped as principal instrument;
(b) Open all monies Islamic facility agreement for Trade line-i (Murabahah letter of credit-i, Murabahah trust receipt-i,
Murabahah accepted bills-i (purchase)) is to be executed between SCM and the bank and to be stamped up to the facilities amount of RM13 million as principal instrument;
(c) First party first legal charge for RM48 million to be created and stamped nominally over property held under Lot 830, Block 7, Muara Tebas land district, Sarawak;
(d) First party first legal charge for RM48 million is to be created and stamped nominally over property held under Lot 1166, Block 8, Muara Tebas land district registered in the name of SCIB;
(e) Open all monies first party charge over cash deposit and letter of set-off are to be executed by SCM and stamped.
(i) Placement of first party Affin Islamic term deposit-i of RM5 million to be held on lien to the bank. Profit earned on the Affin Islamic term deposit-i is to be reinvested/capitalised upon each maturity. In the event the Affin Islamic term deposit-i is uplifted to settle the facility, the amount uplifted is to be replenished within one month,
(f) Islamic corporate guarantee for RM48 million to be executed by SCIB.
SCIB said despite the possibility of fluctuation in the bank’s base financing rate and cost of fund, the facilities are not expected to have any material effect on the earning per share, gearing and net assets per share of the company for financial year ending June 30, 2025.
SCIB lists out the associated risk factors of the Islamic banking facilities to include interest rate risk (changes in interest rates can increase the cost of borrowings for the group); liquidity risk (in event the group experiences liquidity issues, it may default on its obligation on repayment); credit risk (the facilities may increase credit risk of the group which may result in higher interest rates for subsequent facilities); loss of securities (in event the group defaulted on its obligations to the bank, the securities may be seized by the bank) and regulatory risk (failure to comply with various regulations relating to the facilities may result legal implication to the group).
“To mitigate the identified risk factors, the group is practicing prudent financial management to ensure sufficient liquidity to satisfy the obligations to the bank,” said SCIB.
