Launch Partners

Wednesday, February 21, 2024

Launch Partners

Case study: Amanat Lebuhraya Rakyat’s inaugural SRI Sukuk

Amanat Lebuhraya Rakyat (ALR) has issued a sustainability Sukuk Murabahah facility worth RM5.5 billion (US$1.16 billion) in nominal value on the 13th October 2022 in a 13-tranche issuance. The Sukuk facility was issued through bookbuilding and private placement with tenors ranging from two to 15 years.

The issuance completes the restructuring and acquisition of four highway concession companies from the shareholders. ALR, which was set up solely to act as a holding company of highway concessions, will return the highway concessions to the Malaysian government once it has fully repaid the Sukuk.


Gamuda, one of Malaysia’s largest infrastructure companies, was the largest shareholder of the four concessionary companies: Lingkaran Trans Kota, Sistem Penyuraian Trafik KL Barat, KESAS and Syarikat Mengurus Air Banjir dan Terowong. In 2021, Gamuda proposed to the federal government to place the concessions of KESAS, Lingkaran Trans Kota Holdings (Litrak), SMART Tunnel and SPRINT in a trust company. The outcome was ALR, a private not-for-profit company established with the specific purpose of purchasing Gamuda’s toll concessions. It is also tasked with, among others, ensuring urban mobility and enabling the government to achieve its goal of eliminating compensation payments while maintaining the affordability of the highways. Prior to the restructuring, Gamuda held a 70% ownership in Kesas with a 30% ownership held by Perbadanan Kemajuan Negeri Selangor. It held a 50% ownership of SMART Tunnel with the other half owned by MMC Corp. Litrak held a 50% ownership in SPRINT with Gamuda and Kumpulan Perangsang Selangor holding 30% and 20% respectively. As Gamuda owned 42.8% of Lebuhraya Damansara–Puchong, Gamuda’s effective interest in SPRINT was 51.4%.

Prior to Gamuda’s disposal of the assets, the government had been compensating highway tolls. While this allowed for affordability, it was a significant financial burden on the government and concerns were raised over its ability to sustain the highway toll subsidization in the long term.

The Malaysian Ministry of Works noted in a statement that the acquisition will allow the government to save on compensation payments, with net savings for the payment of toll subsidy compensation for the four highways estimated at RM4.3 billion (US$907.68 million).

According to ALR, the savings for the government could be used for and is equivalent to purchasing 4.3 million medical oxygen sets (ventilators) for COVID-19 patients; or purchasing five million nursing beds, or donating five million laptops to students in need.

ALR made an offer on the 8th April 2022, which was approved by the cabinet, to acquire the four highway concession companies from the government for RM5.48 billion (US$1.16 billion) in April 2022, by way of Sukuk.

Gamuda announced on the 13th October that it received a total sum of RM4.26 billion (US$897.1 million) for the total sale of its ownership to ALR.

Despite heightened market volatility, the offering, issued under ALR’s inaugural senior SRI Murabahah program, was oversubscribed, according to ALR.

Although the government has been closely involved in the acquisition and financial restructuring of the highway concession companies, it is notable that the issuance was not guaranteed by the government, “for the avoidance of doubt”.

The first 10 tranches of the offering were issued through bookbuilding with the final three through private placement.

AmInvestment Bank, CIMB Investment Bank and Hong Leong Investment Bank were the joint principal advisors, joint lead arrangers and joint lead managers for the Sukuk program, while Maybank Investment Bank, RHB Investment Bank and United Overseas Bank (Malaysia) also acted as joint lead managers.

Without the need to pay dividends to shareholders, the concession companies’ cash flows (after meeting operational needs) can now be fully channeled towards supporting any debt financing obligations,” ALR noted.

Hong Leong Investment Bank told ISFI that one of the main challenges for the Sukuk issuance was the 100% debt structure of the acquisition. The instrument is structured with a cash flow ring-fencing mechanism where all cash flows accrued to the Sukukholders with no leakages and dividend payout.

The issuance is considered a sustainability Sukuk facility primarily due to the social benefits of providing affordable highways and government savings.

Further, according to ALR’s Sustainability Framework, the Sukuk program contributes to seven SDGs namely SDG 8 of decent work and economic growth, SDG 10 of reduced inequalities, SDG 11 of sustainable cities and communities, SDG 7 of affordable and clean energy, SDG 4 of quality education, SDG 13 of climate action and SDG 12 of responsible consumption and production.

Amanat Lebuhraya Rakyat Inaugural Sustainability Sukuk

RM5.5 billion (US$1.16 billion)

13th October 2022
Summary of terms and conditions
Amanat Leburaya Rakyat
Size of issue
RM5.5 billion (US$1.16 billion) in nominal value
Mode of issue
Trance 1 to 10: Bookbuilding
Tranche 11 to 13: Private placement
To finance the proposed acquisition of the concession companies, refinancing/settlement of the respective existing financing facilities of the concession companies, to pre-fund the initial FSRA balance, to fund the capital expenditure for the ESG projects, general corporate purposes of the ALR Group which are Shariah compliant, and to defray fees, expenses and all other amounts payable under or related to the sustainability Sukuk Murabahah program.
Issuance price
At par
Semi-annual in arrears
Malaysian ringgit
Lead manager(s) and bookrunners
1. AmInvestment Bank
2. CIMB Investment Bank
3. Hong Leong Investment Bank
4. United Overseas Bank (Malaysia)
5. Maybank Investment Bank
6. RHB Investment Bank
Principal advisor(s)
1. AmInvestment Bank
2. CIMB Investment Bank
3. Hong Leong Investment Bank
Governing law
Malaysian law
Legal advisor(s)/council
Adnan Sundra & Low
Islamic structure
Murabahah via a Tawarruq arrangement
‘AAA’ by RAM Rating Services, ‘AAAIS’ by MARC Ratings
Shariah advisor(s)
AmBank Islamic
Sustainability Sukuk framework assessment
1. Tier 1–3 for social and environment benefits by RAM Sustainability
2. Silver by MARC Ratings
Tradable and transferable
Face value/minimum investment
RM1,000 (US$210.59) and multiples thereof

Related Articles


Please enter your comment!
Please enter your name here