Southern Power Generation Sdn Bhd Sukuk MYR 4,000,000,000 - Principal Terms and Conditions

Transcription

1. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions (A) CORPORATE INFORMATION OF ISSUER (1) Name : Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). (2) Address : Registered Address: Pejabat Setiausaha Syarikat, Tingkat 2, Ibu Pejabat, Tenaga Nasional Berhad, No. 129, Jalan Bangsar, 59200 Kuala Lumpur. Business Address: Level 32, PJX-HM Shah Tower, Persiaran Barat, 46050 Petaling Jaya, Selangor Darul Ehsan (3) Date incorporation of : 12-Aug-2016 (4) Place incorporation of : Malaysia (5) Business registration number : 1198060-T (6) Residence status : Resident Controlled Company (7) Place and date of listing : Not Listed (8) Principal activities : The Issuer is principally engaged in the construction of power plants. (9) Authorised, issued and paidup share capital : The issued and paid-up share capital of the Issuer as at 31 August 2017 are as follows: Issued and fully paid-up share capital RM100.00 comprising 100 ordinary shares. (10)Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders : The shareholders and their shareholding in the Issuer as at 31 August 2017 are as follows: Shareholding Shareholder No. of ordinary shares Tenaga Nasional Berhad* ("TNB") 51 51 SIPP Energy Sdn Bhd ("SIPP") 49 49 Total 100 100 (%) * Pending registration in the Issuer's register of members. (11)Board directors of : 1. 2. 3. 4. 5. 6. 7. 8. 9. Dato’ Nor Azman Bin Mufti @ Jaafar Datuk Zainudin Bin Ibrahim Nazmi Bin Othman Shahrir Bin Haji Abdul Latiff Noraini Binti Taib @ Alip Ir. Roslan Bin Abd Rahman (Alternate Director to Datuk Zainudin Bin Ibrahim) Dato’ Anuar Bin Ahmed Dato’ Daing A. Malek Bin Daing A Rahaman Dato’ Norzaity Binti Othman (B) PARTIES TO THE TRANSACTION (1) Origination : No. Roles Name of parties 1 Issuer Southern Power Generation Sdn Bhd 2 Sponsor TNB and SIPP 3 Principal Adviser CIMB Investment Bank Berhad Printed on 15:42:21, 14-Sep-2017 Page 1 of 27
2. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions (2) At point distribution of (3) After distribution : : 4 Lead Arranger CIMB Investment Bank Berhad ("CIMB") and Maybank Investment Bank Berhad ("Maybank IB") (as the "JLAs") 5 Solicitors Messrs Adnan Sundra & Low (acting for the Principal Adviser ("PA")/JLAs) (“ASL”) 6 Solicitors Messrs Zaid Ibrahim & Co (“ZICO”) (acting for the Issuer) 7 Shariah Adviser CIMB Islamic Bank Berhad (“CIMB Islamic”) and Maybank Islamic Berhad (“Maybank Islamic”) (collectively, “Joint Shariah Advisers”) 8 Sukuk Trustee AmanahRaya Trustees Berhad 9 Security Agents- Maybank IB Security Agent 10 Technical Adviser Advisian Malaysia Sdn Bhd (“ITA”) 11 Insurance Adviser Sterling Insurance Brokers Sdn Bhd ("Takaful/Insurance Consultant") 12 Credit Agency 13 Financial Adviser Rating Malaysian Rating Corporation Berhad (“MARC”) CIMB No. Roles Name of parties 1 Issuer SPG 2 Lead Manager CIMB and Maybank IB ("JLMs") No. Roles Name of parties 1 Issuer SPG 2 Sponsor SIPP and TNB 3 Principal Adviser CIMB Investment Bank Berhad 4 Solicitors ASL 5 Security Agents Maybank IB 6 Facility Agent Maybank IB 7 Sukuk Trustee AmanahRaya Trustees Berhad 8 Technical Adviser Advisian Malaysia Sdn Bhd 9 Insurance Adviser Sterling Insurance Brokers Sdn Bhd 10 Credit Rating Agency MARC 11 Central Depository Bank Negara Malaysia ("BNM") 12 Shariah Adviser CIMB Islamic and Maybank Islamic 13 Paying Agent BNM Printed on 15:42:21, 14-Sep-2017 Page 2 of 27
3. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions (C) DETAILS OF FACILITY/PROGRAMME (1) Name of facility : A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. (2) One-time issue or programme : One-time issue (3) Shariah principles sukuk) : (4) Facility description (for : No. Shariah Principles 1 Wakalah bi al-Istithmar 2 Murabahah (via Tawarruq arrangement) A n Islamic medium term notes issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar (" Sukuk Wakalah ” ) which is one of the Shariah principles and concepts approved by the Shariah Advisory Council of the Securities Commission Malaysia (“ SC”) ("SAC") Underlying Transaction Step 1 Pursuant to a wakalah agreement (“Wakalah Agreement ”) entered into between the Sukuk Trustee (acting on behalf of the holders of the Sukuk Wakalah (“ Sukukholders”)) and SPG, the Sukuk Trustee (acting on behalf of the Sukukholders) shall appoint SPG to act as its agent (“Investment Wakeel”) to perform services which include investing the issue proceeds (“Sukuk Proceeds”) in the Wakalah Investments (as defined below). Step 2 SPG, in its capacity as the Investment Wakeel, shall declare a trust over the Sukuk Proceeds and over the Wakalah Investments acquired using the Sukuk Proceeds. The Sukuk Wakalah shall represent the Sukukholders’ undivided and proportionate beneficial interest in the Trust Assets. The “ Trust Assets ” shall comprise of (i) the Sukuk Proceeds, (ii) the Wakalah Investments and (iii) the rights, title, interest, entitlement and benefit in, to and under the Financing Documents (as defined in item 16 of the section entitled “Other terms and conditions”). SPG (as the Issuer) shall issue the Sukuk Wakalah and the Sukukholders shall subscribe to the Sukuk Wakalah by paying the Sukuk Proceeds. The Investment Wakeel shall invest the Sukuk Proceeds received from the Sukukholders into the relevant investment portfolio which shall comprise of: (a) SPG’s Shariah-compliant general business (“Shariah-compliant Business”); and SPG’s Shariah-compliant general business (“Shariah-compliant Business”); and (b) Commodities (as defined in item 1 of the section entitled “Other terms and conditions”) purchased and sold under the Shariah principle of Murabahah (“Commodity Murabahah Investment”). The investments described in (a) and (b) above shall collectively be referred to as the “Wakalah Investments”. Step 3 The Investment Wakeel shall invest part of the Sukuk Proceeds into the Shariah-compliant Business. The value of the Wakalah Investments in respect of the Shariah-compliant Business should be at least 33% of the Wakalah Investments. For the avoidance of doubt, the above ratio of at least 33% of the value of the Wakalah Investments is only applicable at the point of initial investment for each tranche of the respective Sukuk Wakalah, subject to the valuation principles set out in the Wakalah Agreement, and does not need to be maintained throughout the tenure of the Sukuk Wakalah. However, the Investment Wakeel shall ensure that the Shariah-compliant Business shall at all times be a component of the Wakalah Investments. Step 4 The remaining balance of the Sukuk Proceeds shall be invested into the Commodity Murabahah Investment. The Commodity Murabahah Investment shall be effected as follows: (a) SPG as the buyer (“Buyer”) shall issue a purchase order (“Purchase Order”) to the Investment Printed on 15:42:21, 14-Sep-2017 Page 3 of 27
4. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions Wakeel and the Sukuk Trustee (both acting on behalf of the Sukukholders) with an undertaking to purchase the Commodities from the Sukukholders at the Deferred Sale Price (as defined below); (b) Pursuant to the Purchase Order, the Investment Wakeel (on behalf of the Sukukholders), via its agent, will purchase the Commodities on spot basis from the commodity supplier(s) at Bursa Suq Al-Sila’ and/or a commodity broker (“ Commodity Broker A”) (“Commodity Supplier”) at a purchase price equivalent to the remaining balance of the Sukuk Proceeds (“Commodity Purchase Price”). The Commodity Purchase Price shall be in line with the asset pricing requirements stipulated under the SC’s LOLA Guidelines (as defined in item 16 of the section entitled “Other terms and conditions”); (c) Upon acquiring the Commodities, the Investment Wakeel (on behalf of the Sukukholders) will thereafter sell those Commodities to the Buyer for a price equivalent to the Commodity Purchase Price plus the aggregate profit margin and shall be payable on deferred payment basis (“Deferred Sale Price”). For the avoidance of doubt, the Deferred Sale Price shall be equal to the aggregate of the Expected Periodic Distribution Amount (as defined in item 16 of the section entitled “ Other terms and conditions”), if any, and the nominal value of the Sukuk Wakalah. (d) Upon the purchase of the Commodities, the Buyer, via its agent, will immediately sell the Commodities to Bursa Malaysia Islamic Services Sdn Bhd and/or a commodity broker other than Commodity Broker A (“ Commodity Broker B”) (“Commodity Buyer”) on spot basis for cash, at a selling price equivalent to the Commodity Purchase Price (“Selling Price”). Step 5 Returns generated from the Wakalah Investments up to the Expected Periodic Distribution Amount shall be distributed periodically in the form of periodic distributions (“Periodic Distributions”, and each a “Periodic Distribution”). On i) each periodic distribution date; ii) the maturity date of the relevant Sukuk Wakalah (“ Scheduled Dissolution Date”); or iii) the Dissolution Declaration Date (as defined in item 16 of the section entitled “Other terms and conditions”), as the case may be, any returns from the Wakalah Investments in excess of the Expected Periodic Distribution Amount distributable and/or the Dissolution Distribution Amount (as defined in item 16 of the section entitled “Other terms and conditions”) due and payable under the Sukuk Wakalah shall be retained by the Investment Wakeel as an incentive fee for its services as the Investment Wakeel in managing the Wakalah Investments under the Wakalah Agreement. Step 6 SPG as the obligor (“Obligor”) shall grant a purchase undertaking (“Purchase Undertaking”) to the Sukuk Trustee (for the benefit of the Sukukholders), whereby on a Scheduled Dissolution Date or the Dissolution Declaration Date whichever is the earlier, the Obligor shall purchase the Shariah-compliant Business at the Exercise Price (as defined in item 16 of the section entitled “Other terms and conditions”) by entering into a sale agreement. The Sukuk Trustee (acting on behalf of the Sukukholders) shall issue a sale undertaking (“ Sale Undertaking”) in favour of the Issuer under which the Sukuk Trustee shall sell the Shariah-compliant Business to the Issuer at the Exercise Price by entering into a sale agreement upon Voluntary Early Redemption (as defined in item 16 of the section entitled “Other terms and conditions”). Step 7 Proceeds of the Wakalah Investments including the Exercise Price, the Deferred Sale Price and any returns generated shall be utilised to redeem the Sukuk Wakalah at the Dissolution Distribution Amount on the Scheduled Dissolution Date or the Dissolution Declaration Date or the relevant early redemption amount upon Voluntary Early Redemption (if applicable), as the case may be. Any excess in respect of proceeds of the Wakalah Investments thereof shall be retained by the Investment Wakeel as incentive fee. Upon full payment of all amounts due and payable under the Sukuk Wakalah, the relevant trust in respect of the Trust Assets will be dissolved and the relevant Sukuk Wakalah held by the Sukukholders will be cancelled. (5) Currency : Ringgit (6) Expected facility/ programme size : Upto MYR4,000,000,000.00 (7) Option to upsize (for programme) : No Printed on 15:42:21, 14-Sep-2017 Page 4 of 27
5. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions (8) Tenure of facility/ programme : 20 year(s) (9) Availability period for debt/ sukuk programme : Not applicable (10)Clearing settlement platform : PayNet (11)Mode of issue : Book building Book running Private placement Bought deal Direct placement (12)Selling restrictions : Part 1 of Schedule 6 of the Capital Markets & Services Act, 2007 (CMSA) Part 1 of Schedule 7 of the CMSA Read together with Schedule 9 of CMSA Section 2(6) of the Companies Act 2016 Other-Selling Restrictions at Issuance: The Sukuk Wakalah may only be offered, sold, transferred or otherwise disposed of, directly or indirectly, to persons falling within Section 2(6) of the Companies Act 2016 (as amended from time to time) (“Companies Act”); and Part I of Schedule 6 or Section 229(1)(b) and Part I of Schedule 7 or Section 230(1)(b), read together with Schedule 9 or Section 257(3) of the CMSA. Selling Restrictions after Issuance: The Sukuk Wakalah may only be offered, sold, transferred or otherwise disposed of, directly or indirectly, to persons falling within Section 2(6) of the Companies Act; and Part I of Schedule 6 or Section 229(1)(b) read together with Schedule 9 or Section 257(3) of the CMSA. (13)Tradability and transferability : Tradable & transferable (14)Other regulatory approvals required in relation to the issue, offer or invitation to subscribe or purchase PDS/sukuk, and whether or not obtained : None. (15)Details of security/ collateral pledged : The Sukuk Wakalah shall be secured by the following security, including, but not limited to: and (1) A first ranking National Land Code charge over the lease of the land on which the Project (as defined in item 16 of the section entitled “Other terms and conditions”) is situated (“Charge”) or, the first ranking assignment of SPG’s rights, interests, titles and benefits over the lease agreement of the land on which the Project is situated (in the event the Charge cannot be created pending the application to the land office to change the categories of land use or pending the issuance of separate issue document of title); (2) A debenture incorporating a first ranking fixed and floating charge on all of the assets of SPG, both present and future excluding the Distribution Account (as defined in item 16 of the section entitled “ Other terms and conditions”), the Junior Facility Repayment Account (as defined in item 16 of the section entitled “Other terms and conditions”) and the Sukuk Trustee's Reimbursement Account (as defined in item 9 of the section entitled “Other terms and conditions”); (3) A first ranking assignment of all of SPG’s rights, interests, titles and benefits under the Project Documents (as defined in item 16 of the section entitled “Other terms and conditions”) and proceeds therefrom (including the PPA (as defined in item 16 of the section entitled “ Other terms and conditions”) and revenues thereunder) but excluding the IPP Licence (as defined in the PPA); (4) A first ranking assignment of SPG's rights, interests, titles and benefits in all performance and/ or maintenance bonds in relation to the Project; Printed on 15:42:21, 14-Sep-2017 Page 5 of 27
6. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions (5) A first ranking assignment of SPG's rights, interests, titles and benefits in all insurance policies/ Takaful contracts of SPG that are required in respect of the Project, as advised by the Takaful/ Insurance Consultant; (6) A first ranking assignment and charge of SPG’s rights, interests, titles and benefits in all Designated Accounts (as set out in the section entitled “Details of designated accounts, if applicable”) and the credit balances therein and a first ranking charge over the Permitted Investments (as defined in the section entitled “Permitted investments, if applicable”); and (7) Any other security as may be required by the Credit Rating Agency in respect of the Sukuk Wakalah to achieve the credit rating as stated herein or as advised by the Solicitors acting for the JLAs and to be mutually agreed between SPG and the JLAs. Documentation for the purpose of items (1) to (7) above shall be referred to hereinafter as the “Security Documents”. The Senior Hedging Banks (as defined in item 16 of the section entitled “Other terms and conditions”) may share the security above with the Sukukholders on a pari passu basis. In such case, the security sharing arrangement and the application of proceeds received from such security will be governed by an intercreditor agreement to be entered into or acceded by, inter alia, SPG, the Sukuk Trustee, the Security Agent and the Senior Hedging Banks (“Intercreditor Agreement”). (16)Details guarantee of : Not guaranteed (17)Convertibility Issuance of : Non-convertible (18)Exchangeability of Issuance : Non-exchangeable (19)Call option : No call option (20)Put option : No put option (21)Details covenants of : a. Positive covenants The Issuer covenants that so long as the Sukuk Wakalah are outstanding, it shall: (a) maintain a Paying Agent in Malaysia; (b) procure that the Paying Agent shall notify the Sukuk Trustee, through the Facility Agent, if the Paying Agent does not receive payment from the Issuer on the due dates as required under the Trust Deed and the terms and conditions of the Sukuk Wakalah; (c) maintain in full force and effect all relevant authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) and will promptly obtain any further authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) which is or may become necessary to enable it to own its assets, to carry on its business and to enter into or perform its obligations under the Financing Documents (as defined in item 16 of the section entitled “Other terms and conditions”) or to ensure the legality, validity, enforceability, admissibility in evidence of its obligations or the priority or rights of the Sukuk Trustee, the Security Agent and the Sukukholders under the Financing Documents where failure to do so would have a Material Adverse Effect (as defined in item 16 of the section entitled “Other terms and conditions”) and it shall comply with the same; (d) at all times on demand by the Sukuk Trustee execute or cause to be executed all such further documents and do all such further acts reasonably necessary at any time or times to give further effect to the terms and conditions of the Transaction Documents (as defined in item 16 of the section entitled “Other terms and conditions”); (e) exercise reasonable diligence in carrying out its business and affairs in a proper and efficient manner and in accordance with sound financial and commercial standards and practices and its memorandum and articles of association/constitution; (f) promptly perform and carry out in all material respect obligations under the Project Documents and shall to the extent within its reasonable control, procure that the other parties to the Project Documents comply with their respective obligations thereunder; (g) comply at all times with the provisions of the Trust Deed and the terms and conditions of the Sukuk Wakalah at all times; (h) prepare its financial statements on a basis consistently applied in accordance with approved accounting standards in Malaysia and those financial statements shall give a true and fair view of its Printed on 15:42:21, 14-Sep-2017 Page 6 of 27
7. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions results of the operations for the period to which the financial statements are made up; (i) maintain an accounting system and records in compliance with applicable statutory requirements and in accordance with approved accounting standards in Malaysia which are adequate to record and reflect its operations and financial condition, keep proper books and accounts at all times and provide the Sukuk Trustee and any person and any person appointed by it (e.g. auditors) access to such books and accounts to the extent permitted by law; (j) promptly comply with all applicable laws (including the provisions of the CMSA and all circulars, conditions or guidelines issued by the SC from time to time) as may be applicable to it; (k) open and maintain each of the required Designated Accounts and pay all relevant amounts into such accounts and make all payments from such accounts, only as permitted under the Financing Documents and comply with the terms and conditions of the Financing Documents in all matters in relation to the Designated Accounts (including to maintain the Minimum Required Balance (as defined in item 16 of the section entitled “Other terms and conditions”) at all times commencing from Scheduled COD). Further, it shall forthwith notify the Security Agent in writing of any change in the authorised signatories to any of the Designated Accounts; (l) cause all loans or advances, if any, made by its directors, shareholders and/or its related company or associate company to be subordinated to the Sukuk Wakalah and no repayment and/or prepayment of such advances shall be made except for the payment and/or reimbursement to the Sponsors on the issue date of the Sukuk Wakalah in respect of the Total Project Costs incurred prior to the Financial Close (as defined in item 16 of the section entitled “Other terms and conditions”) (except for the amount paid for the subscription of the ordinary shares in SPG before Financial Close) based on documentary evidence or unless otherwise provided for and permitted under the Financing Documents; (m) ensure that the terms in the Financing Documents do not contain any matter which is inconsistent with the provisions of the IM; (n) provide a certified true copy of the IPP Licence from the EC to the Sukuk Trustee and the Security Agent no later than one (1) year prior to the Scheduled COD (as defined in item 16 of the section entitled “Other terms and conditions”) or prior to the Initial Operation Date (as defined in the PPA), whichever is earlier; (o) ensure that the EIA Approval (as defined in the PPA) is obtained prior to the Commencement Date (as defined in the PPA); (p) ensure that the Sponsors Gross Equity Contribution (as defined in the PPA) amounts to 20% or more of the Total Project Costs (as defined in the PPA) as at the date which is one (1) year after the Commercial Operation Date (as defined in the PPA) of the Second Generating Block (as defined in the PPA), as calculated in accordance with the terms of the PPA; (q) without cost to the Sukuk Trustee, take out and maintain at all times such relevant insurance policies/ Takaful contracts that are required in respect of the Project, as advised by the Takaful/ Insurance Consultant, unless it is an Uninsurable Risk (as defined in item 16 of the section entitled “Other terms and conditions”). In respect of an Uninsurable Risk the Issuer shall procure that relevant insurance policies/Takaful contracts in respect of such Uninsurable Risk are replaced to the satisfaction of the Sukuk Trustee within one hundred and fifty (150) days of a risk becoming an Uninsurable Risk and the relevant insurance policies/Takaful contracts have expired or have been terminated; and (r) any other covenants as advised by the Solicitors acting for the JLAs and mutually agreed between the Issuer and the JLAs. b. Negative covenants The Issuer covenants that so long as the Sukuk Wakalah are outstanding, it shall not without the consent of the Sukukholders: (a) enter into any contract, transaction or engage in any business or activity other than: (i) the Financing Documents to which it is a party (or any amendment or supplemental agreement thereto); (ii) as provided for or permitted in the Financing Documents; (iii) the ownership, management and disposal of the Trust Assets as provided in the Financing Documents; or (iv) such other matters as incidental to the Financing Documents. (b) permit any amendment, supplement or variation to its memorandum and articles of association/constitution in a manner which may be materially prejudicial to the interests of the Printed on 15:42:21, 14-Sep-2017 Page 7 of 27
8. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions Sukukholders; (c) reduce its paid-up share capital (except by way of redemption of redeemable preference shares permitted under the Financing Documents) whether by varying the amount, structure or value thereof or the rights attached thereto or by converting any of its share capital into stock, or by consolidating, dividing or sub-dividing all or any of its shares, or by any other manner; (d) obtain or permit to exist any financial indebtedness other than the Junior Facility and the Permitted Indebtedness (as defined in item 16 of the section entitled “Other terms and conditions”); (e) create or permit to exist any security interest over its assets other than the security created over the Junior Facility Repayment Account in relation to the Junior Facility and the Permitted Security Interest (as defined in item 16 of the section entitled “Other terms and conditions”); (f) sell, transfer or lease or otherwise dispose of or in any case cease to exercise control over, whether by a single transaction or a number of transactions, related or not, the whole or part of the Issuer’s undertaking, business or assets, except: (i) the transfer of the Interconnection Facilities (as defined in the PPA) to TNB under the PPA; or (ii) sale of the Net Eletrical Output (as defined in the PPA) pursuant to the PPA; or (iii) disposal of any of the Issuer’s undertaking, business or assets due to obsolescence, deterioration, surplus, redundancy, damage and/or defects; or (iv) as permitted under the Sukuk Wakalah; or (v) solely for the purpose of facilitating any Islamic financing in connection with the Sukuk Wakalah or any Permitted Indebtedness; or (vi) sale or disposal which would not have a Material Adverse Effect; or (vii) sale or disposal constituted by creation of Permitted Security Interest; or (viii) sale or disposal in exchange for other assets comparable or superior as to value, (g) change the utilisation of proceeds of the issue of the Sukuk Wakalah from the purposes as stated in the Financing Documents or the IM; (h) change the nature or scope of its business or suspend a substantial part of its business which would have a Material Adverse Effect; (i) enter into any transactions, whether directly or indirectly, with any interested person (including, without limitation, a director, major shareholder and chief executive or persons connected with them), unless: (i) such transaction shall be on terms that are no less favourable to the Issuer than those that could have been obtained in a comparable transaction from persons who are not interested persons; and (ii) with respect to any transaction involving an aggregate payment or value equal to or greater than the agreed percentage ratios as set out in the Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, the Issuer obtains a certification from an independent adviser that such transaction is carried out on fair and reasonable terms, provided that the Issuer certifies to the Sukuk Trustee that such transaction complies with paragraph (i) above, that the Issuer has received the certification referred to in paragraph (ii) above (where applicable) and that the transaction has been approved by the majority of its board of directors or shareholders in a general meeting (as the case may require); (j) provide or permit to exist any guarantee to any party; (k) obtain or permit to exist any loans or advances from its directors, shareholders, related company or associated companies, unless these loans and advances are subordinated to the Sukuk Wakalah; (l) lend any money to any other party other than its directors, officers or employees as part of their terms of employment; (m) amend, vary, terminate (except due to lapse of time), replace or supplement (or agree to do so) any of its Project Documents and/or the Equity Contribution Agreement (as defined in item 16 of the section entitled “Other terms and conditions”) save and except for (i) the execution of the Supplemental PPA (as defined in item 15 of the section entitled “Other terms and conditions”); or (ii) where such action would neither prejudice the interests of the Sukukholders nor have a Material Adverse Effect; Printed on 15:42:21, 14-Sep-2017 Page 8 of 27
9. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions (n) waive, or agree to waive any breach or proposed breach in any of the Project Documents and/or the Equity Contribution Agreement by any of its counterparties save and except where such waiver would neither materially affect the interests of the Sukukholders nor have a Material Adverse Effect; (o) do any act or omit to do any act, or execute or omit to execute any document which may render any provision of any of the Project Documents and/or the Equity Contribution Agreement to be illegal, void, voidable or unenforceable which would have a Material Adverse Effect; (p) open any bank accounts other than (i) Designated Accounts, Distribution Account, Sukuk Trustee’s Reimbursement Account and Junior Facility Repayment Account, (ii) any accounts opened pursuant to Permitted Investments or (iii) any accounts permitted under the Financing Documents or approved by the Sukuk Trustee; (q) agree to any adjustment to the commercial rates under the PPA in the event such adjustment will result in the minimum FSCR (Without Cash) in the financial model falling below 1.16 times at any time during the remaining tenure of the Sukuk Wakalah, calculated at the point of the proposed adjustment; “FSCR (Without Cash)” is defined as C / D where: C = the previous twelve (12)-month Net Available Cash From Operations Only; and D = the previous twelve (12)-month Finance Service. “Net Available Cash From Operations Only” for the relevant FSCR Period will be calculated as: (a) all revenue received by the Issuer; plus (b) any Takaful/insurance proceeds received by the Issuer; plus (c) amounts received in respect of liquidated damages from the EPC Contractor and/or any other relevant counterparties (if any); less (d) all operating and maintenance expenses (including costs and expenses associated with the repair and replacement of damaged equipment), ongoing capital expenses, taxes, duties, working capital requirements and liquidated damages paid by the Issuer (if any); less (e) any other associated financing costs (such as agency and consultant fees) paid by the Issuer, and for the avoidance of doubt, any double counting in respect of the FSCR (Without Cash) shall be disregarded; and “FSCR Period” means for the purposes of this paragraph and the Financial Covenants, the period of twelve (12) months in the full financial year immediately preceding the FSCR Determination Date and for the purposes of the Distribution Covenants (as defined below), the period of twelve (12) months preceding the proposed payment date of the Restricted Payment; “FSCR Determination Date” means each anniversary of the COD provided that the first FSCR Determination Date shall fall after the expiry of a full financial year end of the Issuer after the COD; “Finance Service” means the sum of all profit, principal payments and net hedging settlements in relation to the Sukuk Wakalah and any Permitted Indebtedness (except in relation to shareholder loans and financing facilities subordinated to the Sukuk Wakalah) paid during the FSCR Period or falling due or payable during the next twelve (12) months (as the case may be), but excluding any associated financing costs captured in the Net Available Cash (as defined below) or Net Available Cash From Operations Only. (r) refinance the Junior Facility (as defined in item 16 of the section entitled “Other terms and conditions”) other than via proceeds from a facility which is junior or subordinated to the Sukuk Wakalah and/or equity-like instruments based on terms similar to the Junior Facility or such other terms as approved by the Sukukholders or from the proceeds of equity injection and/or subordinated financings/advances from the shareholders earmarked for the refinancing of the Junior Facility; (s) declare, pay or make any Restricted Payment (as defined in item 16 of the section entitled “Other terms and conditions”) unless: Printed on 15:42:21, 14-Sep-2017 Page 9 of 27
10. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions (i) the FSCR (as defined below) calculated based on the latest available management accounts of the Issuer and deducting such Restricted Payment amount from Net Available Cash would be equal to or greater than 1.50 times post distribution and in order to determine the FSCR, the Issuer shall no later than 10 (ten) days prior to the proposed payment date of the Restricted Payment provide a certificate to the Sukuk Trustee, setting out the computation of the FSCR as confirmed by two (2) directors of the Issuer; (ii) COD has occurred and first principal repayment of the Sukuk Wakalah has been made; (iii) No Dissolution Event (as described in the section entitled “Events of defaults or enforcement events, where applicable, including recourse available to investors”) has occurred and is continuing or would occur as a result of such Restricted Payment; and (iv) the MRA (as set out in the section entitled “ Details of designated accounts, if applicable”) is funded according to the requirements under the PPA and the FSRA (as defined in the section entitled “Details of designated accounts, if applicable”) is fully funded or equivalent security (which is nonrecourse to the Issuer) has been provided in favour of the Security Agent, in accordance with the provisions set out in the section entitled “Details of designated accounts, if applicable”, (collectively, items (i) to (iv) above are referred to as “Distribution Covenants”); (t) consolidate, amalgamate with, or merge with or into another entity, or enter into any demerger or reconstruction; and (u) any other covenants as advised by the Solicitors acting for the JLAs and as agreed between the Issuer and the JLAs. c. Financial covenants The Issuer covenants that so long as the Sukuk Wakalah are outstanding and commencing from COD, it shall: (a) ensure that as at each FSCR Determination Date, the FSCR shall be at least 1.25 times and such calculations shall be based on the then latest available audited financial statements of the Issuer; and (b) submit a compliance certificate to the Sukuk Trustee and the Security Agent on an annual basis, as soon as the latest audited financial statements of the Issuer are available, which certificate shall be signed by two (2) directors of the Issuer certifying the compliance and the computation of the FSCR. “FSCR” is defined as A / B where: A= the previous twelve (12)-month Net Available Cash; and B= the next twelve (12)-month Finance Service. “Net Available Cash” for the relevant FSCR Period will be calculated as: (a) all revenue received by the Issuer; plus (b) all cash balances in the Designated Accounts of the Issuer including Permitted Investments as at the first day of the relevant FSCR Period plus; (c) amount available for drawing under the FSRA SBLC (as defined in item 16 of the section entitled “Other terms and conditions”) as at the first day of the relevant FSCR Period; plus (d) any Takaful/insurance proceeds received by the Issuer; plus (e) amounts received in respect of liquidated damages from the EPC Contractor and/or any other relevant counterparties (if any); less (f) all operating amounts received in respect of liquidated damages from the EPC Contractor and/or any other relevant counterparties (if any); less (g) any other associated financing costs (such as agency and consultant fees) paid by the Issuer, during such relevant FSCR Period. For the avoidance of doubt, any double counting in respect of the FSCR shall be disregarded. d. Information covenants The Issuer covenants that so long as the Sukuk Wakalah are outstanding, it shall: (a) deliver to the Sukuk Trustee within seven (7) business days the updated revised Initial Financial Model (as defined in the PPA) upon agreement with TNB in accordance with the PPA, showing the recomputed CRF (as defined in the PPA); Printed on 15:42:21, 14-Sep-2017 Page 10 of 27
11. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions (b) provide to the Sukuk Trustee at least on an annual basis, a certificate signed by at least one (1) director confirming that it has complied with all its obligations under the Financing Documents and the terms and conditions of the Sukuk Wakalah and there does not exist or had not existed, from the issue date of the Sukuk Wakalah or the date of the previous certificate, as the case may be, any Dissolution Event or enforcement event, and if such is not the case, to specify the same; (c) deliver to the Sukuk Trustee the following: (i) as soon as they become available (and in any event within one hundred and eighty (180) days after the end of its financial year) copies of its financial statements for that year which shall contain the income statements and balance sheets of the Issuer, and which are audited by a firm of independent certified public accountants approved by the Sukuk Trustee; (ii) as soon as they become available (and in any event within ninety (90) days after the end of its half year) copies of unaudited semi-annual financial statements for that half year which shall contain the income statements and balance sheets of the Issuer prepared in accordance with approved accounting standards in Malaysia and which are duly certified by any one of its directors; (iii) promptly, such additional financial or other information or reports as the Sukuk Trustee may from time to time reasonably request including without limitation, such information as the Sukuk Trustee may require in order for the Sukuk Trustee to discharge its duties and obligations to the extent permitted by law provided that the provision of such information would not result in the Issuer breaching any stock exchange requirements, duty of confidentiality or confidentiality obligations; and (iv) promptly, copies of any accounts (other than those provided above), reports, notice, statements or circulars issued by the Issuer to its shareholders. Such accounts, reports, notices, statements or circulars may be circulated by the Sukuk Trustee at its discretion to the Sukukholders, investors and the Credit Rating Agency; (d) promptly notify the Sukuk Trustee of any change in its condition (financial or otherwise) and of any litigation, arbitration, administrative or other proceedings of any nature whatsoever as referred to in items (i)(i) and (i)(ii) of the section entitled “Representations and warranties”; (e) promptly upon obtaining knowledge thereof, notify the Security Agent and the Sukuk Trustee of any material breach, termination, rescission, discharge (otherwise by performance), supplement, novation, amendment or waiver in writing of, or indulgence in writing under, any provision of any Project Document or the Equity Contribution Agreement or any variation order issued under the EPC Contract (as defined in item 16 of the section entitled “Other terms and conditions”), which would require the approval of the Sukukholders; (f) provide to the Security Agent and the Sukuk Trustee as soon as possible, but in any event within ten (10) business days of receipt by the Issuer or the issuance of the Issuer of, copies of all default notices, suspension notices, force majeure notices, change in law notices and termination notices in relation to the Project Documents; (g) promptly upon it obtaining knowledge thereof, notify the Sukuk Trustee of any change in its board of directors and/or shareholders, in any event within thirty (30) days of such change; (h) promptly give notice: (i) to the Sukuk Trustee of any change in the utilisation of proceeds from the Sukuk Wakalah from that set out in the Financing Documents or the IM; (ii) to the Sukuk Trustee and the Security Agent of the occurrence of any Dissolution Event; (iii) to the Sukuk Trustee of any substantial change in the nature of its business; (iv) to the Sukuk Trustee of any change in the withholding tax position or taxing jurisdiction of the Issuer; (v) to the Sukuk Trustee and the Security Agent of any circumstances that has occurred that would materially prejudice the Issuer or the security interests created under the Financing Documents; (vi) to the Sukuk Trustee of any other matter that may materially prejudice the interests of the Printed on 15:42:21, 14-Sep-2017 Page 11 of 27
12. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions Sukukholders; (vii) to the Sukuk Trustee and the Security Agent of the happening of any event that has caused, or could cause, one or more of the following; (aa) any amount secured or payable under the Sukuk Wakalah to become immediately payable; (bb) the Sukuk Wakalah to become immediately enforceable; (cc) any other right or remedy under the terms, provisions or covenants of the Sukuk Wakalah or the trust deed to become immediately enforceable; (i) during the period prior to the COD, the Issuer shall submit a progress report every quarter to the ITA for verification, with a copy to the Security Agent and the Sukuk Trustee; (j) subject to the relevant representatives complying with all reasonable Project Site (as defined in the PPA) rules and policies, permit representatives of the Security Agent, the Sukuk Trustee and their advisers, including without limitation, the Takaful/Insurance Consultant and the ITA, during business hours and upon reasonable written advance notice, to visit and inspect the Project Site (as defined in the PPA), to examine the current plans, specifications, and manuals (and all supplements thereto), technical and statistical data, accounting books, records and other data in the possession or control of the Issuer with respect to the Project and to make copies and abstracts therefrom as may be required in order for such parties to discharge their duties and obligations, to attend any tests conducted at the Project under the EPC Contract or the PPA and to confer with its principal officers and engineers; (k) notify the Sukuk Trustee immediately upon becoming aware of a risk becoming an Uninsurable Risk; (l) notify the Security Agent and the Sukuk Trustee on a quarterly basis in the event that the payments of fuel cost made by SPG is higher than the payments of fuel cost received by SPG under the PPA and such variance exceeds ten per cent (10%); (m) within thirty (30) days from the issuance of the Sukuk Wakalah, deliver to the Sukuk Trustee a revised financial model reflecting the variation of the commercial rates under the PPA pursuant to the EC Letter (as defined in item (C)(vi) of the section entitled “Conditions Precedent”); and (n) any other covenants as advised by the Solicitors acting for the JLAs and as agreed between the Issuer and the JLAs. (22)Details designated account(s) of : No. Account name 1 Parties responsible for opening account RM SPG Disbursement Account ("RM DA") Parties Signatories Sources of funds responsible to account to maintain/ operate account Utilisation of funds Security Security (i) Net proceeds Agent and Agent and from the issuance of SPG SPG the Sukuk Wakalah (after deducting fees and expenses in relation to the Sukuk Wakalah, payment and/or reimbursement to the Sponsors for the Total Project Costs incurred prior to the Financial Close (except for the amount paid for the subscription of the Prior to COD, all payments from the RM DA (save and except for equity injection and/or subordinated financings/advances from the shareholders earmarked for the refinancing or interest payments and fees payable under the Junior Facility which shall be paid directly to Printed on 15:42:21, 14-Sep-2017 Page 12 of 27
13. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions ordinary shares in SPG before Financial Close) based on documentary evidence and the amount required to be deposited into the Sukuk Trustee's Reimbursement Account, as required under the SC's Trust Deeds Guidelines, effective on 12 August 2011 (as amended from time to time) (“SC's Trust Deeds Gui d e li ne s ”)); (ii) Proceeds from the drawdown of the Junior Facility (net of all interest payments and fees payable under the Junior Facility prior to the Scheduled COD) and the Shareholders’ Capital Contribution (as defined in item 16 of the section entitled “Other terms and conditions”) prior to COD; (iii) Equity injection and/or subordinated financings/advances from the shareholders earmarked for refinancing or interest payments and fees payable under the Junior Facility; and (iv) Proceeds from Takaful/ insurance claims and compensation proceeds received by SPG relating to business interruption or delay in start-up prior to COD. Printed on 15:42:21, 14-Sep-2017 Page 13 of 27 the lenders of the Junior Facility) shall be applied in accordance with the priority of cash flow as set out below and based on certification from the ITA or such other acceptable professional certification or documentary evidence in form and substance acceptable to the Security Agent, except for utilisation in (iii) below: (i) Payments of Periodic Distributions and other amounts payable under the Sukuk Wakalah (including fees, costs and expenses related to the Sukuk Wakalah) and the associated hedging f a c i l i t i e s ; (ii) Payments for Total Project Costs (as defined in item 16 of the section entitled “Other terms and conditions”) payable in RM; (iii) Upon conversion to United States dollar (“USD”), transfer to the USD DA (as defined below); (iv) Transfers to the RM OA (as defined below) annually for payment of petty cash and staff costs (“Petty Cash and Staff Costs”) in accordance with the construction budget but not more than RM15 million per year; and (v) Transfers to the
14. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions FSRA for compliance with the FSRA requirements. Up to twelve (12) months after COD, any unutilised amount in the RM DA shall be transferred into the RA (as defined below) and thereafter the RM DA will be closed. 2 USD SPG Disbursement Account ("USD DA") Security Security Upon conversion to (i) Prior to COD, Agent and Agent and USD from the RM payments for Total SPG SPG DA Project Costs payable in USD, based on certification from the ITA or such other acceptable professional certification or documentary evidence in form and substance acceptable to the Security Agent; and (ii) Transfers to the FSRA for compliance with the FSRA requirements. Up to twelve (12) months after COD, any unutilised amount in the USD DA shall be converted into RM and transferred into the RA. Thereafter the USD DA will be closed. 3 RM Operating SPG Account ("RM OA") SPG SPG Printed on 15:42:21, 14-Sep-2017 Page 14 of 27 (i) Prior to COD, amounts transferred from the RM DA for payment of the Petty Cash and Staff Costs; and (ii) On or after COD, amounts transferred from the RA for payment of the next one (1) month operating and maintenance costs (including (i) Prior to COD, for payments of the Petty Cash and Staff Costs in accordance with the construction budget but not more than RM15.0 million per year; (ii) On or after COD, payments of the Operating, Maintenance and Capital Costs (other
15. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions Petty Cash and Staff Costs), cess fund, start-up, taxes, duties and capital expenditures (“Operating, Maintenance and Capital Costs”). 4 USD Operating Account ("USD OA") SPG SPG SPG 5 Revenue Account ("RA") SPG Security Security (i) All revenue, Agent and Agent and income, proceeds SPG SPG from Takaful/ insurance claims and compensation proceeds (other than those required to be deposited into the IPA (as defined below)) and other amounts received by SPG; (ii) Equity injection and/or subordinated financings/advances from the shareholders earmarked for the refinancing or interest payments and fees payable under the Junior F a c i l i t y ; (iii) Amounts which is in excess of the Minimum Required Balance and transferred from the FSRA; and (iv) Unutilised amount in the RM DA transferred from the RM DA and unutilised amount in Printed on 15:42:21, 14-Sep-2017 Page 15 of 27 than fuel cost, taxes and duties) based on the annual operating budget approved by the board of SPG (subject to a variance of no more than ten per cent (10%)); and (iii) On or after COD, upon conversion to USD, transfer to the USD OA (as defined below). Upon conversion to Payment of the USD from the RM Operating, OA Maintenance and Capital Costs payable in USD On or after COD, funds in the RA (save and except for equity injection and/or subordinated financings/advances from the shareholders earmarked for the refinancing or interest payments and fees payable under the Junior Facility which shall be paid directly to the lenders of the Junior Facility) shall be utilised in accordance with the priority of cashflow as set out below: (i) for transfers to the RM OA within three (3) business days before each month end for the next one (1) month payment of the Operating, Maintenance and Capital Costs (other than fuel cost, taxes and duties) to be incurred by SPG in respect of the
16. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions the USD DA, after conversion into RM, up to twelve (12) months after COD. Printed on 15:42:21, 14-Sep-2017 Page 16 of 27 Project, based on the annual operating budget approved by the board of SPG (subject to a variance ofno more than ten per cent ( 1 0 % ) ) ; (ii) for payments of fuel cost, taxes and duties based on payment invoices received by SPG; (iii) for payments of Periodic Distributions, principal obligations and other amounts payable under the Sukuk Wakalah (including fees, costs and expenses related to the Sukuk Wakalah) and the associated hedging f a c i l i t i e s ; (iv) payment on principal and interest, fees, costs and expenses related to Permitted Indebtedness (except in relation to item (d) and item (h) of the definition of the Permitted Indebtedness); (v) for transfers to the FSRA for compliance with the FSRA re q ui re me nts; (vi) for transfers to the MRA (as defined below) for compliance with the MRA requirements; (vii) for Voluntary Early Redemption; (viii) during the tenure of the Junior Facility, for transfers into the Junior Facility Repayment Account for Restricted
17. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions 6 Finance Service Reserve Account (“FSRA”) SPG Security Agent Security Agent Printed on 15:42:21, 14-Sep-2017 Page 17 of 27 From Scheduled COD, if at any time the balance in the FSRA is less than the Minimum Required Balance, amounts transferred from the RM DA and/or USD DA or the RA (after the RM DA and/or USD DA have been closed) to replenish the FSRA to the Minimum Required Balance in accordance with the priority of cashflow for the RM DA and/or USD DA or the RA (after the RM DA and/or USD DA have been closed). Alternatively, SPG, at its option (“SBLC Option”), shall procure a FSRA SBLC (as defined in item 16 of the section entitled “Other terms and conditions”) for the purposes of Payments (as defined in item 16 of the section entitled “Other terms and conditions”) subject to meeting all the Distribution Covenants; and (ix) only when the Junior Facility is fully repaid, for Restricted Payments subject to meeting all the Distribution Covenants, including transfers into the Distribution Account (as defined in item 16 of the section entitled “Other terms and conditions”). (i) If at any time there is insufficient amounts in the RA to pay any amounts due under the Sukuk Wakalah, an amount equal to the shortfall shall be utilised from the FSRA or in the event that the FSRA SBLC Option is exercised for all or part of the Minimum Required Balance, the FSRA SBLC shall be drawn to pay for such shortfall in the amounts due under the Sukuk Wakalah; and (ii) If any time the balance in the FSRA exceeds the Minimum Required Balance, such difference between the total in the FSRA and the Minimum Required Balance shall be transferred to the RA upon request by the Issuer to be
18. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions maintaining the Minimum Required Balance. The FSRA SBLC shall be used to secure all or part of the Minimum Required Balance in lieu of the cash deposits in the FSRA. In the event the SBLC Option is exercised, the Security Agent shall have the right to draw on the FSRA SBLC if it is not renewed by SPG one (1) month prior to the expiry of the FSRA SBLC or rating of the issuing bank of the FSRA SBLC is downgraded to a rating below AA3 by RAM or AA- by MARC or BBB by Standard & Poor’s or Baa2 by Moody's or their respective equivalent and SPG does not replace the FSRA SBLC with another FSRA SBLC issued by an issuing bank with a rating of at least AA3 by RAM or AAby MARC or BBB by Standard & Poor’s or Baa2 by Moody's or their respective e q u i v a l e n t or alternatively by depositing an amount equivalent to the FSRA SBLC into the FSRA within thirty (30) days from such downgrade (provided that the downgrade does not render the FSRA SBLC null and the FSRA Printed on 15:42:21, 14-Sep-2017 Page 18 of 27 utilised in accordance with the priority of cash flow for the RA.
19. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions SBLC is still available for d r a wi ng ) . In the event the credit balance in the FSRA and/or the amount available for drawing under the FSRA SBLC is less than the Minimum Required Balance, the Issuer shall top up such funds from the RM DA and/or USD DA or the RA (after the RM DA and/or USD DA have been closed) or procure the issuance of the FSRA SBLC within three (3) months from the date of the failure to maintain the Minimum Required Balance. 7 Maintenance Reserve Account (“MRA”) SPG SPG SPG 8 Insurance Proceeds Account (“IPA”) SPG Security Security Proceeds of The monies in the Agent and Agent and Takaful/ insurance IPA shall be applied SPG SPG claims received by towards repair or SPG (other than any replacement of the Takaful/ insurance damaged property claims relating to and any excess business thereafter shall be Printed on 15:42:21, 14-Sep-2017 Page 19 of 27 SPG shall, in order to fulfil its obligations under the PPA, establish a Shariah-compliant reserve account or accounts for the sum of RM24.0 million. The MRA shall be built up, with amounts transferred from the RA, over a three (3) year period commencing on the COD at the rate of RM8.0 million per annum. SPG is allowed to draw from the MRA to pay for maintenance expenses of the Project, including any repair or replacement, however the balance in the MRA must be reinstated to RM24.0 million over the three (3) months following the withdrawal (or such other date as may be agreed between the TNB and SPG) in accordance with the priority of cashflow for the RA.
20. Southern Power Generation Sdn Bhd (the “Issuer” or “SPG”). A Sukuk issuance of up to RM4.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar. Principal Terms and Conditions interruption or delay transferred to the in start-up prior to RA to be utilised in COD). accordance with the priority of cashflow for the RA. (23)Name of credit rating agency and credit rating : No. Credit Rating Agency 1 (24)Conditions precedent : Credit rating Malaysian Rating Corporation Bhd AA- IS (MARC) Final/ Indicative rating Partial Amount rated Indicative rating No MYR 4,000,000,000.00 Upon completion of documentation and, unless waived by the JLAs, compliance of all conditions precedent, including but not limited to the conditions precedent set out below, and other applicable conditions (to be agreed with the Issuer) to the satisfaction of the JLAs: A. Main Documentation (i) The Financing Documents (save for the Charge), and such other documents as may be advised by the Solicitors acting for the JLAs (and agreed upon by the Issuer) have been executed and, where applicable, stamped/exempted and presented for registration; (ii) All relevant acknowledgements of notices of assignment for the Designated Accounts, notices and where applicable, consents from the relevant counterparties to the Project Documents, insurance policies/Takaful contracts, performance and/or maintenance bonds in relation to the Project which are to be assigned shall have been made or received other than those which are required to be executed or perfected under Conditions Subsequent (as defined in item 15 of the section entitled “Other terms and conditions”); and (iii) Receipt from the Issuer of certified true copies of the relevant Project Documents, executed and stamped (where applicable) and any other supplemental documentation in relation thereto. B. Issuer Receipt from the Issuer of: (i) Certified true copies of its Certificate of Incorporation, and the memorandum and articles of association/constitution; (ii) Certified true copies of the latest Return for Allotment of Shares, Notification of Change in the Registered Address and Notification of Change in the Register of Directors, Managers and Secretaries; (iii) Certified true copies of the board resolutions authorising, among others, the execution of the relevant Financing Documents to which it is a party; (iv) A list of the authorised signatories and their respective specimen signatures; (v) A report of the relevant company search of the Issuer; and (vi) A report of the relevant winding up search of the Issuer. C. General (i) Evidence showing TNB and SIPP have injected at least RM10.0 million into the Issuer as ordinary shares; (ii) The Equity Contribution Agreement in form and substance satisfactory to the JLAs has been executed and stamped/exempted from stamp duties and is unconditional; (iii) A copy of the receipt of acknowledgement by SC of the lodgement in respect of the Sukuk Wakalah Printed on 15:42:21, 14-Sep-2017 Page 20 of 27