232 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 RM310M (contd.) The major covenants that are required to be complied by RSV are as follows: (i) to ensure the Finance to Equity Ratio (“FER”) not more than 80:20; (ii) to maintain a Financial Service Cover Ratio (“FSCR”) of at least 1.25 times; and (iii) cannot make any transfer in order to declare or pay any dividends or make any distribution, whether income or capital in nature, to its directors, shareholders, related companies or associated companies, or redeem or cancel via capital reduction any redeemable preference shares or make repayment or payments in relation to subordinated financing (Restricted Payments) unless the Issuer certifies to the Sukuk Trustee that the following conditions have been fully satisfied on the restricted payment date: a) The Solar Plant reaches Commercial Operation Date (“COD”). b) The first scheduled principal payment under the Proposed Sukuk has been redeemed in full. c) No covenant under the transaction documents has been breached. d) No Event of Default (“EoD”) or potential EoD has occurred and is continuing. e) The Issuer shall obtain confirmation in writing from the credit rating agency that such Restricted Payments will not adversely affect the rating of the Proposed Sukuk. f) The Issuer’s Finance Service Reserve Account (“FSRA”) is fully funded up to the FSRA Minimum Required Balance. g) The Project Companies’ Maintenance Reserve Account (“MRA”) is fully funded up to the MRA Minimum Required Balance. h) The Distribution Financial Service Cover Ratio (“FSCR”) will be at least 1.50 times. The Sukuk Murabahah RM310M will be issued in 3 tranches. As at 31 December 2022, first tranche has been issued. Musharakah Medium Term Notes (“mMTN”) On 17 June 2011, RPII issued RM710,000,000 nominal value Medium Term Notes (“mMTN”) under the Syariah principal of Musharakah. The mMTN was issued for the following purposes: (i) RM610,000,000 to refinance the existing outstanding loans under the Commodity Murabahah Term Financing-i and Conventional Syndicated Term Loan. The remaining balance after full settlement of the outstanding loans, was used to finance the construction of the power plant in RPII and to fund the Finance Service Reserve Account (“FSRA”) as required by the mMTN; (ii) RM90,000,000 as advances to the shareholders of RPII; and (iii) the remaining balance was used to finance all costs and expenses incurred in relation to the mMTN Programme exercise (including the initial guarantee fees) and for working capital requirements. The mMTN has a tenure of up to 18 years from the date of first issuance and is issued in 2 tranches as follows: Tranche 1 RM360,000,000 nominal value comprising of 10 series of annual redemption maturing annually from 2 to 11 years. The Yield-to-Maturity ranges from 4.1% to 5.7% per annum, and is repayable semi-annually. Tranche 2 RM350,000,000 nominal value comprising of 7 series of annual redemption maturing from annually 12 to 18 years. The Yield-to-Maturity ranges from 5.15% to 5.70% per annum, and is repayable semi-annually.
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