Pembinaan BLT Sdn Bhd (PBLT), an entity under the Ministry of Finance Inc, will issue its first tranche of RM1 billion sukuk by mid-February.

The exercise will be part of the 25-year Islamic Medium Term Notes (IMTNs) Programme of up to RM10 billion to be raised by its wholly-owned subsidiary, Aman Sukuk Bhd, to fund the nationwide construction of police quarters and facilities under the “build, lease and transfer” model.

The first tranche would be done through a book building process scheduled to take place from Jan 24,” said the firm’s chief financial officer, Mohamad Salahudeen Sahul Hamid, at a press conference today.

He said the tenor and yield was yet to be determined.

The proceeds from the IMTNs would be used to fund development, financing and operating costs and to refinance short-term borrowings.

The government agency's borrowing currently stood at RM5 billion, and including interest, would amount to RM6.1 billion, to be settled by August 2012.

PBLT may issue up to RM2 billion this year if the sukuk is over subscribed, however, it would be subject to market conditions.

“We do see some foreign fund participation but the majority will come from local funds,” he added.

Target to complete 52 projects

Meanwhile, managing director and chief executive officer Mohammed Redza Mohd Yusof said the company targetted to complete 52 projects worth over RM3 billion by 2014.

PBLT has 74 development projects nationwide estimated at nearly RM9 billion in terms of development, financing and operating costs.

As at Dec 31, 2010, the company completed 22 projects with a gross development cost of RM2.03 billion while another 10 projects were partially completed.

Redza said the private sector was responsible for funding and completing the projects.

“The government will then pay for the completed projects over a longer period of time rather than in one lump sum, which will alleviate the strain on government finances,” he explained.

The Aman Sukuk Bhd’s IMTN programme was accorded a “AAAIS” credit rating by the Malaysian Rating Corp Bhd.

CIMB Investment Bank Bhd is the principal advisor and lead arranger for the IMTN Programme while the joint lead managers are AmInvestment Bank Bhd, Bank Islam, CIMB, Maybank Investment Bank Bhd and RHB Investment Bank Bhd.

- Bernama