Launch Partners

Sunday, December 10, 2023

Launch Partners

Case study: Cypark Renewable Energy’s private placement Sukuk

Cypark Renewable Energy (CRE), a wholly-owned subsidiary of energy provider and developer Cypark Resources, completed its RM500 million (US$105.64 million) perpetual Sukuk Musharakah program with the issuance of the third tranche.

The RM165 million (US$34.86 million) facility was fully subscribed by Jakel Capital, a major shareholder of the company.

“The Sukuk issuance will provide the sufficient capital requirement and we are confident that our ongoing renewable energy projects will be completed by the targeted completion dates, which will also set forth the future growth of the company,” Lindayani Tajudin, deputy CEO of Cypark Resources, shared.

Proceeds from the issuance will be used for the company’s working capital, capital expenditure, the repayment of existing financing and borrowings, defraying costs and other expenses related to the Sukuk issuance.

While the pricing for the private placement facility was not disclosed, the subscription by Jakel Capital was premised on market yields that are comparable to the previous issuances under the perpetual Sukuk Musharakah program, according to Cypark Resources. Its recent issuance, an RM8 million (US$1.69 million) facility issued in February this year, carried a coupon rate of 6.85%.

The subscription by Jakel Capital is the second such wave of capital from the company, with Jakel Capital constituting the sole investor in CRE’s RM100 million (US$21.13 million) private placement Sukuk on the 12th September this year.

Notably, while the Sukuk Musharakah program accommodates the issuance of private placement facilities, the modality constitutes a departure for CRE, which has issued RM234 million (US$49.44 million)-worth of Sukuk through book-building.

Jakel Capital became the single largest shareholder in Cypark Resources in January this year with the private placement acquisition of 176.65 million units of the company’s shares for a consideration of RM67.1 million (US$14.18 million). The exercise resulted in Jakel Capital owning a 27.33% direct and indirect stake in Cypark Resources.

Following the acquisition, Cypark Resources appointed Muhammad Ashraf Muhammad Amir, the group chief investment officer of Jakel group of companies and CEO of Jakel Capital, as its non-independent and non-executive director.

According to Muhammad, Jakel Capital’s capital infusion reaffirms its commitment toward its investment in Cypark and its journey in the renewable energy sector.

Cypark Resources’ Private Placement Sukuk

RM165 million (US$34.86 million)

26th September 2023
Summary of terms and conditions
Cypark Renewable Energy
Cypark Resources
Size of issue
RM165 million (US$34.86 million)
Mode of issue
Private placement
To finance working capital, capital expenditure and the repayment of existing financings.
Profit rate
Malaysian ringgit
Maturity date
Lead manager(s)
RHB Investment Bank
Principal advisor(s)
RHB Investment Bank
Governing law
Malaysian law
Legal advisor(s)/council
Adnan Sundra & Low, acting on behalf of the lead manager
Islamic structure
Shariah advisor(s)
RHB Islamic bank
Investor breakdown
Jakel Capital

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