Digital services company MY EG Services (MYEG), issued RM25 million (US$5.34 million) in Sukuk on the 6th November 2023. Earlier in August this year, MYEG, which is also the concessionaire for Malaysia’s Electronic Government Multimedia Super Corridor flagship application, issued RM300 million (US$64.07 million)-worth of sustainability Sukuk.
The proceeds from the paper will be channeled toward meeting its Shariah compliant working capital requirements, capital expenditures, investments and its financing of business expansions, among others.
The facility was MYEG’s sixth series of Islamic capital market issuance under its RM1 billion (US$213.55 million) sustainable Sukuk Wakalah program established in 2022.
As part of its role as a government concessionaire, MYEG builds and operates the electronic channel to deliver services from a number of government agencies.
In May this year, MYEG’s previous concession agreement with the Immigration Department was renewed for another three-year period.
Currently, the company has two concessions — the renewal of driver licenses for the Road Transport Department and the renewal of foreign worker permits for the Immigration Department.
Due to its government concessionaire status, the company’s reliance on government contracts has been a lingering concern. ISFI previously reported that MYEG was considered by MARC Ratings to be exposed to renewal and termination risks as well as regulatory changes.
Closely following the issuance of its newest facility, MARC Ratings affirmed its ‘AA-IS’ rating for the Sukuk program.
According to the rating agency, while MYEG is still exposed to renewal and termination risks, “any impact on the group’s credit profile from termination of concessions is considered limited given their low contribution to group revenue, accounting for 5% in H1 2023.”
The revenue from its cross-border trade blockchain platform, Zetrix, is expected to be a key contribution for the group, with the rating agency expecting it to contribute up to RM306 million (US$65.35 million) in revenue between this year and 2025.
Zetrix, which aims to improve the efficiency of imports and exports between China and Malaysia, is also expected to promote the demand for climate-friendly products through enabling the tracking of sustainably-produced products.
In a recent development, Zetrix initiated its initial exchange offering on Coinstore and listed on MEXC and BitForex in October this year.
The development of the platform was also notably funded through MYEG’s sustainability Sukuk.
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MYEG’s November Sukuk RM25 million (US$5.34 million)  6th November 2023 |
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| Summary of terms and conditions | |
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Issuer |
MY EG Services |
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Size of issue |
RM25 million (US$5.34 million) |
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Mode of issue |
Private placement, bought deal, bookbuilding |
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Purpose |
To meet the Shariah compliant working capital requirements, capital expenditures, investments, financing of business expansions of the group, among others. |
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Tenor |
Three years |
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Profit rate |
5.4% |
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Payment |
Semi annual |
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Currency |
Malaysian ringgit |
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Maturity date |
6th November 2026 |
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Lead manager(s) |
CIMB Islamic Bank and HSBC Amanah |
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Principal advisor(s) |
CIMB Islamic Bank and HSBC Amanah |
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Governing law |
Malaysian law |
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Legal advisor(s)/council |
Zaid Ibrahim & Co |
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Islamic structure |
Wakalah Bi Istithmar, Murabahah (via Tawarruq arrangement) |
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Underlying asset |
Shariah compliant commodities |
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Rating |
‘AA-IS’ by MARC Ratings |
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Shariah advisor(s) |
Shariah advisory boards of CIMB Islamic Bank and HSBC Amanah |
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Tradability |
Yes |