The Malaysian unit of monosodium glutamate producer Ajinomoto, a brand that has been a household name in many countries across the globe, has announced that it has secured an Islamic facility with MUFG Bank (Malaysia). NESSREEN TAMANO has the details.
The sustainability-linked Islamic financing agreement was executed for a principal sum of up to RM100 million (US$24.71 million) to facilitate the construction of a new plant located in [email protected], Negeri Sembilan in Malaysia. This includes funding for mechanical and electrical engineering works, and the purchase and installation of the plant, machinery and equipment.
The facility is offered with a five-year tenor to meet sustainability performance targets as outlined in the Sustainability Linked Loan Principles issued by the Loan Market Association and the Asia Pacific Loan Market Association. One of Ajinomoto’s targets is to achieve a 30% reduction in greenhouse gas emission intensity during the financial period from the 31st March 2019 to the 31st March 2026.
“The sustainability-linked Islamic facility for capex dynamically affirms that Ajinomoto (Malaysia) (AMB)’s actions in environment, social and governance (ESG) are highly evaluated by MUFG,” AMB said, adding that it also helps the company achieve the UN Sustainable Development Goals.
The overlap of sustainability and ESG with Islamic financing is in favor of AMB, which has fully met the requirements for a Halal certification in Malaysia.
AMB, considered to be one of the very first Japanese companies to be set up in Malaysia in 1961, produces a range of Halal-certified food and seasoning products.
|Ajinomoto (Malaysia)’s Islamic financing|
RM100 million15th December 2020
|Type of facility||Sustainability-linked Islamic financing|
|Use of proceeds||To part-finance construction of a new plant|
|Principal amount||RM100 million (US$24.71 million)|
|Governing law||Malaysian law|
|Date executed||15th December 2020|
|Effects of facility||The facility is not expected to have any significant effect on the net assets and earnings per share of the company for the financial year ending the 31st March 2021|