230 F INANC IAL Statements 05 Sect ion Ranhi ll Ut i l i t i es Berhad NOTES TO THE F INANC I AL STATEMENTS For the year ended 31 December 2022 31. LOANS AND BORROWINGS (Contd.) Sukuk Murabahah RM650M On 26 January 2018, a wholly-owned subsidiary of the Group, SAJ Capital Sdn. Bhd. (“SAJC”), issued RM650,000,000 nominal value Islamic Medium Term Notes under the Shariah principal of Murabahah (“Sukuk Murabahah RM650M”). The Sukuk Murabahah is issued for the following purposes: (i) RM410,000,000 to partly refinance the Group’s existing outstanding Sukuk Musharakah RM650M; (ii) RM17,603,000 to fund the Finance Service Reserve Account (“FSRA”) as required by the Sukuk Murabahah RM650M; (iii) RM13,159,000 was used to finance all costs and expenses incurred in relation to the Sukuk Murabahah RM650M exercise; and (iv) The remaining balance was used for working capital requirements and general funding requirements of the Group. The Sukuk Murabahah RM650M has a tenure of up to 12 years from the date of first issuance. The Sukuk Murabahah RM650M is secured over the followings: (i) first ranking fixed assignment and charge over RCSB’s entire shareholding in RanhillSAJ (formerly known as SAJ Ranhill Sdn. Bhd.); (ii) first ranking assignment of all income and revenue including any dividends and distributions received or receivable by RCSB in respect of RCSB’s shareholdings in RanhillSAJ, whether income or capital in nature, and the payment and repayment of shareholder’s loans and advances received or receivable by RCSB from RanhillSAJ and an irrevocable instruction from RCSB to RanhillSAJ, to deposit all the proceeds of the income and revenue including any dividends and distributions receivable by RCSB from RanhillSAJ to the Revenue Account; (iii) a first ranking debenture comprising a fixed and floating charge over all present and future assets, rights, and interests of SAJC excluding the Sukuk Trustee’s Reimbursement Account; (iv) a first ranking fixed charge and assignment over the Designated Accounts and the credit balances therein; and (v) any other security as may be advised by the Solicitors. The major covenants that are required to be complied by SAJC are as follows: (i) to maintain a Financial Service Cover Ratio (“FSCR”) of at least 1.5 times; and (ii) to maintain a debt/equity ratio of not higher than 1.50 times on a consolidated basis.
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