UniTapah Sdn Bhd Sukuk RM600 Million - Information Memorandum

Transcription

1. ELECTRONIC DISCLAIMER This Information Memorandum may be sent to you in an electronic form . Distribution of the Information Memorandum to any persons, other than the person receiving the electronic transmission from the Issuer, the Principal Adviser/Lead Arranger/Lead Manager and their respective agents and any person retained to advise the person receiving the electronic transmission with respect thereto, is unauthorised. The person receiving the electronic transmission from the Issuer, the Principal Adviser/Lead Arranger/Lead Manager and their respective agents is prohibited from disclosing the Information Memorandum, altering the contents of the Information Memorandum or forwarding a copy of the Information Memorandum or any portion thereof by electronic mail or otherwise to any person. By opening and accepting this electronic transmission of the Information Memorandum, the recipient agrees to the foregoing. Transmission over the internet may be subject to interruptions, transmission blackout and delayed transmission due to internet traffic, incorrect data transmission due to the public nature of the internet, data corruption, interception, unauthorised amendment, tampering, viruses or other technical, mechanical or systemic risks associated with internet transmissions. The Issuer, the Principal Adviser/Lead Arranger/Lead Manager and their respective agents have not accepted and will not accept any responsibility and/or liability for any such interruption, transmission blackout, delayed transmission, incorrect data transmission, corruption, interception, amendment, tampering or viruses or other technical, mechanical or systemic risks or any consequences thereof. The electronic transmission of the Information Memorandum is intended only for use by the addressee name in the email and may contain legally privileged and/or confidential information. If you are not the intended recipient of the e-mail, you are hereby notified that any dissemination, distribution or copying of the email, and any attachments thereto, is strictly prohibited. If you have received the email in error, please immediately notify by reply email and permanently delete all copies of the e-mail and destroy all printouts of it. (The rest of this page has been left blank intentionally)
2. Serial No : UNITAPAH SDN BHD UNITAPAH SDN BHD (846665-X) (846665-X) UNITAPAH SDN BHD (846665-X) UNITAPAH SDN BHD UNITAPAH SDN BHD UNITAPAH SDN BHD (846665-X) (846665-X) (846665-X) (846665-X) INFORMATION INFORMATION MEMORANDUM MEMORANDUM INFORMATION MEMORANDUM INFORMATION MEMORANDUM INFORMATION INFORMATIONMEMORANDUM MEMORANDUM Issuance Issuance of of Sukuk Sukuk Murabahah Murabahah of of up to million in value Issuance Sukuk Murabahah of upIssuance to RM600.0 RM600.0 millionMurabahah in nominal nominalof value Issuance ofof Sukuk Murabahah of of Issuance ofSukuk Sukuk Murabahah of up to RM600.0 million in nominal value up to RM600.0 million in nominal value up uptotoRM600.0 RM600.0million millionininnominal nominalvalue value P RINCIPAL A DVISER/L EAD A RRANGER/L EAD M ANAGER P PRINCIPAL RINCIPAL A ADVISER DVISER/L /LEAD EAD A ARRANGER RRANGER/L /LEAD EAD M MANAGER ANAGER P RINCIPAL A DVISER /L EAD A RRANGER /L EAD M ANAGER RINCIPALA ADVISER DVISER/L /LEAD EADA ARRANGER RRANGER/L /LEAD EADM MANAGER ANAGER PPRINCIPAL PRINCIPAL ADVISER /LEAD ARRANGER /LEAD MANAGER Kenanga Investment Bank Berhad Kenanga Investment Bank Berhad Kenanga Kenanga Investment Investment Bank Bank Berhad Berhad (15678-H) (15678-H) (15678-H) KenangaInvestment InvestmentBank BankBerhad Berhad Kenanga Kenanga Bank Berhad KenangaInvestment Investment (15678-H)Bank Berhad (15678-H) (15678-H) (15678-H) This Information Memorandum is dated 29 October 2014 This This Information Information Memorandum Memorandum is is dated dated 29 29 October October 2014 2014 ThisInformation InformationMemorandum Memorandumisisdated dated29 29October October2014 2014 This This Information Memorandum isis dated 2929 October 2014 This Information Memorandum dated October 2014
3. IMPORTANT NOTICE THE ISLAMIC SECURITIES IN THE NOMINAL VALUE OF UP TO RM600 .0 MILLION ("SUKUK MURABAHAH") SHALL NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, NOR MAY THIS INFORMATION MEMORANDUM ("INFORMATION MEMORANDUM") AND ITS CONTENTS OR ANY DOCUMENTS OR OTHER MATERIALS IN CONNECTION THEREWITH BE DISTRIBUTED IN MALAYSIA OTHER THAN TO PERSONS FALLING WITHIN THE RELEVANT CATEGORY OF PERSONS SPECIFIED IN SECTION 4(6) OF THE COMPANIES ACT, 1965, AS AMENDED FROM TIME TO TIME AND (i) AT ISSUANCE, THE SUKUK MURABAHAH MAY ONLY BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED DIRECTLY OR INDIRECTLY TO PERSONS FALLING WITHIN THE RELEVANT CATEGORY OF THE PERSONS SPECIFIED IN SECTION 4(6) OF THE COMPANIES ACT, 1965, AS AMENDED FROM TIME TO TIME, AND PERSONS TO WHOM AN OFFER OR INVITATION TO SUBSCRIBE THE SUKUK MURABAHAH MAY BE MADE AND TO WHOM THE SUKUK MURABAHAH ARE ISSUED WOULD FALL WITHIN SCHEDULE 6 OR SECTION 229(1)(b) AND SCHEDULE 7 OR SECTION 230(1)(b) READ TOGETHER WITH SCHEDULE 9 OR SECTION 257(3) OF THE CAPITAL MARKETS AND SERVICES ACT, 2007 (“CMSA”); (ii) AFTER ISSUANCE, THE SUKUK MURABAHAH MAY ONLY BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED DIRECTLY OR INDIRECTLY TO PERSONS FALLING WITHIN THE RELEVANT CATEGORY OF THE PERSONS SPECIFIED IN SECTION 4(6) OF THE COMPANIES ACT, 1965, AS AMENDED FROM TIME TO TIME AND PERSONS TO WHOM AN OFFER OR INVITATION TO PURCHASE THE SUKUK MURABAHAH WOULD FALL WITHIN SCHEDULE 6 OR SECTION 229(1)(b) READ TOGETHER WITH SCHEDULE 9 OR SECTION 257(3) OF THE CMSA, AS SPECIFIED IN THE PRINCIPAL TERMS AND CONDITIONS OF THE SUKUK MURABAHAH APPENDED AS APPENDIX I HEREIN. Responsibility Statements This Information Memorandum has been approved by the directors of UniTapah Sdn Bhd (846665-X) ("Issuer" or “UniTapah”) and the Issuer accepts full responsibility for the accuracy of the information contained in this Information Memorandum. The Issuer, after having made all reasonable enquiries, confirms that this Information Memorandum contains all information with respect to the Issuer which is material in the context of the Sukuk Murabahah. The opinions and intentions expressed in this Information Memorandum in relation to the Issuer are honestly held, have been reached after considering all relevant circumstances and are based on reasonable assumptions and there are no other facts in relation to the Issuer or the Sukuk Murabahah the omission of which would, in the context of the Sukuk Murabahah issuance, make any statement in this Information Memorandum misleading in any material respect and all reasonable enquiries have been made by the Issuer to ascertain such facts and to verify the accuracy of all such information and statements. No representation or warranty, expressed or implied, is made such that the information remains unchanged in any respect as of any date or dates after those stated herein, with respect to any matter concerning the Issuer or any statement made in this Information Memorandum. The Issuer and its board of directors accept full responsibility for the information contained in this Information Memorandum. Important Notice and General Statement of Disclaimer This Information Memorandum is being furnished on a private and confidential basis solely for the purpose of enabling prospective investors to consider the purchase of the Sukuk Murabahah. It is a condition to the issuance of the Sukuk Murabahah that the Sukuk Murabahah are assigned, on issue, a rating of AA2 by RAM Rating Services Berhad. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the rating agency. None of the information or data contained in this Information Memorandum has been independently verified by Kenanga Investment Bank Berhad as principal adviser, lead arranger and lead manager in respect of the Sukuk Murabahah ("Principal Adviser/Lead Arranger/Lead Manager"). Accordingly, no representation, warranty or undertaking, express or implied, is given or assumed by the Principal Adviser/Lead Arranger/Lead Manager as to the authenticity, origin, validity, accuracy or completeness of such information and data or that the information or data remains unchanged in any respect after the relevant date shown in this Information Memorandum. The Principal Adviser/Lead Arranger/Lead Manager has not accepted and will not accept any responsibility for the information and data contained in this Information Memorandum or otherwise in relation to the Sukuk Murabahah and shall not be liable for any consequences of reliance on any of the information or data in this Information Memorandum. It is to be noted that although the Issuer has sought the advice of the Shariah Adviser with regards to the conformity of the Sukuk Murabahah and the structure and mechanism (as described in the Principal Terms and Conditions of the Sukuk Murabahah and in Appendix 1 of the Principal Terms and Conditions of the Sukuk Murabahah) with Shariah principles (a copy of the pronouncement by the Shariah Adviser is appended as Appendix III herein), no representation, warranty or undertaking, express or implied, is given by the Issuer as to Shariah permissibility of the structure or the issue and trading of the Sukuk Murabahah and the Issuer, the Principal Adviser/Lead Arranger/Lead Manager and/or the Shariah Adviser shall not be liable for any consequences of such reliance and/or assumption of any such compliance. Each recipient should perform and is deemed to have consulted its own professional advisers and obtained independent Shariah advice on the Shariah permissibility of the structure or the issue and trading of the Sukuk Murabahah. Any non-compliance with Shariah principles may have legal consequences. The information in this Information Memorandum supersedes all other information and material previously supplied (if any) to the recipients. By taking possession of this Information Memorandum, the recipients are acknowledging and agreeing and are deemed to have acknowledged and agreed that they will not rely on any previous information supplied. No person is authorised to give any information or data or to make any representation or warranty other than as contained in this Information Memorandum and, if given or made, any such information, data, representation or warranty must not be relied upon as having been authorised by the Issuer, the Principal Adviser/Lead Arranger/Lead
4. Manager or any other person . This Information Memorandum has not been and will not be made to comply with the laws of any jurisdiction other than Malaysia ("Foreign Jurisdiction"), and has not been and will not be lodged, registered or approved pursuant to or under any legislation of (or with or by any regulatory authorities or other relevant bodies of) any Foreign Jurisdiction and it does not constitute an issue, offer or sale of, or an invitation to subscribe or purchase the Sukuk Murabahah or any other securities of any kind by any party in any Foreign Jurisdiction. This Information Memorandum is not and is not intended to be a prospectus. Unless otherwise specified in this Information Memorandum, the information contained in this Information Memorandum is current as at the date hereof. The distribution or possession of this Information Memorandum in or from certain jurisdictions may be restricted or prohibited by law. Each recipient is required to seek appropriate professional advice regarding, and to observe, any such restriction or prohibition. Neither the Issuer nor the Principal Adviser/Lead Arranger/Lead Manager accepts any responsibility or liability to any person in relation to the distribution or possession of this Information Memorandum in or from any such Foreign Jurisdiction. By accepting delivery of this Information Memorandum, each recipient agrees to the terms upon which this Information Memorandum is provided to such recipient as set out in this Information Memorandum, and further agrees and confirms that (a) it will keep confidential all of such information and data, (b) it is lawful for the recipient to subscribe for or purchase the Sukuk Murabahah under all jurisdictions to which the recipient is subject, (c) the recipient has complied with all applicable laws in connection with such subscription or purchase of the Sukuk Murabahah, (d) the Issuer, the Principal Adviser/Lead Arranger/Lead Manager and their respective directors, officers, employees and professional advisers are not and will not be in breach of the laws of any jurisdiction to which the recipient is subject as a result of such subscription or purchase of the Sukuk Murabahah, and they shall not have any responsibility or liability in the event that such subscription or purchase of the Sukuk Murabahah is or shall become unlawful, unenforceable, voidable or void, (e) it is aware that the Sukuk Murabahah can only be offered, sold, transferred or otherwise disposed of directly or indirectly in accordance with the relevant selling restrictions and all applicable laws, (f) it has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of subscribing or purchasing the Sukuk Murabahah, and is able and is prepared to bear the economic and financial risks of investing in or holding the Sukuk Murabahah, (g) it is subscribing or accepting the Sukuk Murabahah for its own account, and (h) it is a person to whom an issue, offer or invitation to subscribe or purchase the Sukuk Murabahah would constitute persons falling within any one or more of the categories of persons specified in Section 4(6) of the Companies Act, 1965, as amended from time to time and (i) at issuance, the Sukuk Murabahah may only be offered, sold, transferred or otherwise disposed directly or indirectly to persons falling within the relevant category of the persons specified in Section 4(6) of the Companies Act 1965, as amended from time to time, and persons to whom an offer or invitation to subscribe the Sukuk Murabahah may be made and to whom the Sukuk Murabahah are issued would fall within Schedule 6 or Section 229(1)(b) and Schedule 7 or Section 230(1)(b) read together with Schedule 9 or Section 257(3) of the CMSA; and (ii) after issuance, the Sukuk Murabahah may only be offered, sold, transferred or otherwise disposed directly or indirectly to persons falling within the relevant category of the persons specified in Section 4(6) of the Companies Act 1965, as amended from time to time and persons to whom an offer or invitation to purchase the Sukuk Murabahah would fall within Schedule 6 or Section 229(1)(b) read together with Schedule 9 or Section 257(3) of the CMSA. Each recipient is solely responsible for seeking all appropriate expert advice as to the laws of all jurisdictions to which it is subject. For the avoidance of doubt, this Information Memorandum shall not constitute an offer or invitation to subscribe or purchase the Sukuk Murabahah in relation to any recipient who does not fall within item (h) above. This Information Memorandum or any document delivered under or in relation to the issue, offer and sale of the Sukuk Murabahah is not, and should not be construed as, a recommendation by the Issuer and/or the Principal Adviser/Lead Arranger/Lead Manager to subscribe or purchase the Sukuk Murabahah. This Information Memorandum is not a substitute for, and should not be regarded as, an independent evaluation and analysis and does not purport to be allinclusive. Each recipient should perform and is deemed to have made its own independent investigation and analysis of the Issuer, the Sukuk Murabahah and all other relevant matters, and each recipient should consult its own professional advisers. All information and statements herein are subject to the detailed provisions of the respective agreements referred to herein and are qualified in their entirety by reference to such documents. Neither the delivery of this Information Memorandum nor the offering, sale or delivery of any Sukuk Murabahah shall in any circumstance imply that the information contained herein concerning the Issuer is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Sukuk Murabahah is correct as of any time subsequent to the date indicated in the document containing the same. Neither the Principal Adviser/Lead Arranger/Lead Manager nor any other advisers to the Sukuk Murabahah undertake to review the financial condition or affairs of the Issuer or to advise any investor of the Sukuk Murabahah of any information coming to their attention. All statements contained in this Information Memorandum that are not statement of historical facts constitute ‘forward looking statements’. Some of these statements can be identified by forward looking terms such as ‘expect’, ‘believe’, ‘plan’, ‘instead’, ‘estimate’, ‘anticipate’, ‘may’, ‘will’, ‘would’, ‘could’ or similar words. However, these words are not the exclusive means of identifying forward-looking statements. All of these statements are based on estimates and assumptions made by the Issuer and although believed to be reasonable, are subject to risks and uncertainties that may cause actual events or future results to be materially different than expected or indicated by such statements and estimates, and no assurance can be given that any such statements or estimates will be realised. In light of these and other uncertainties, the inclusion of forward-looking statements in this Information Memorandum should not be regarded as a representation or warranty by the Issuer or any other persons that the future events as anticipated by the Issuer will occur. Any such statements are not guarantees of performance and involve risks and uncertainties many of which are beyond the control of the Issuer.
5. This Information Memorandum includes certain historical information , estimates, or reports thereon derived from sources mentioned in this Information Memorandum and other parties with respect to the Malaysian economy, the material businesses which the Issuer operates and certain other matters. Such information, estimates, or reports have been included solely for illustrative purposes. No representation or warranty is made as to the accuracy or completeness of any information, estimates and/or reports thereon derived from such sources or from other third party sources and nothing contained herein shall be relied upon as a promise or representation by the Issuer or its advisers as to the past or the future. Acknowledgement The Issuer hereby acknowledges that it has authorised the Principal Adviser/Lead Arranger/Lead Manager to circulate or distribute this Information Memorandum on its behalf in respect of or in connection with the proposed offer or invitation to subscribe for and issue of, the Sukuk Murabahah to prospective investors and that no further evidence of authorisation is required. Statements of Disclaimer by the Securities Commission Malaysia A copy of the final Information Memorandum will be deposited with the Securities Commission Malaysia ("SC"), which takes no responsibility for its contents. The issue, offer or invitation in relation to the Sukuk Murabahah in this Information Memorandum or otherwise are subject to the fulfilment of various conditions precedent including without limitation the approval of the SC. The issuance of the Sukuk Murabahah has been authorised by the SC vide the SC’s letter dated 30 May 2014 pursuant to the CMSA and the Guidelines on Sukuk (“Sukuk Guidelines”) revised on 28 August 2014 and effective on 28 August 2014. Please note that any approval of the SC shall not be taken to indicate that the SC recommends the subscription or purchase of the Sukuk Murabahah. The SC shall not be liable for any non-disclosure on the part of the Issuer and assumes no responsibility for the correctness of any statements made or opinions or reports expressed in this Information Memorandum. INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THE INVESTMENT. IT IS RECOMMENDED THAT PROSPECTIVE INVESTORS CONSULT THEIR FINANCIAL, LEGAL AND OTHER ADVISERS BEFORE PURCHASING OR ACQUIRING OR SUBSCRIBING FOR THE SUKUK MURABAHAH. Documents Incorporated by Reference The following documents published or issued from time to time after the date hereof shall be deemed to be incorporated in, and to form part of, this Information Memorandum: (i) the most recently published audited annual financial statements and, if published later, the most recently published interim financial statements (if any) of the Issuer; and (ii) all supplements or amendments to this Information Memorandum circulated by the Issuer, if any, save that any statement contained herein or in a document which is deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purpose of this Information Memorandum to the extent that a statement contained in any such subsequent document which is deemed to be incorporated by reference herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Information Memorandum. The Issuer will provide, without charge, to each person to whom a copy of this Information Memorandum has been delivered, upon the request of such person, a copy of any or all of the documents deemed to be incorporated herein by reference unless such documents have been modified or superseded as specified above. Requests for such documents should be directed to the Issuer at its offices set out at the end of this Information Memorandum. (The rest of this page has been left blank intentionally)
6. CONFIDENTIALITY To the recipient of this Information Memorandum : This Information Memorandum and its contents are strictly confidential and are made strictly on the basis that they will remain confidential. Accordingly, this Information Memorandum and its contents, or any information, which is made available in connection with any further enquiries, must be held in complete confidence. This Information Memorandum is submitted to prospective investors specifically in reference to the Sukuk Murabahah and may not be reproduced or used, in whole or in part, for any purpose, nor furnished to any person other than those to whom copies have been sent by the Principal Adviser/Lead Arranger/Lead Manager. The recipient must return this Information Memorandum and all reproductions whether in whole or in part and any other information in connection therewith to the Principal Adviser/Lead Arranger/Lead Manager promptly upon the Principal Adviser/Lead Arranger/Lead Manager’s request if the recipient is not a person falling within the relevant category of persons specified in Section 4(6) of the Companies Act, 1965, as amended from time to time and as specified in (i) at issuance, the Sukuk Murabahah may only be offered, sold, transferred or otherwise disposed directly or indirectly to persons falling within the relevant category of the persons specified in Section 4(6) of the Companies Act, 1965, as amended from time to time, and persons to whom an offer or invitation to subscribe the Sukuk Murabahah may be made and to whom the Sukuk Murabahah are issued would fall within Schedule 6 or Section 229(1)(b) and Schedule 7 or Section 230(1)(b) read together with Schedule 9 or Section 257(3) of the CMSA; and (ii) after issuance, the Sukuk Murabahah may only be offered, sold, transferred or otherwise disposed directly or indirectly to persons falling within the relevant category of the persons specified in Section 4(6) of the Companies Act 1965, as amended from time to time and persons to whom an offer or invitation to purchase the Sukuk Murabahah would fall within Schedule 6 or Section 229(1)(b) read together with Schedule 9 or Section 257(3) of the CMSA. (The rest of this page has been left blank intentionally)
7. TABLE OF CONTENTS Page No . i-vi DEFINITIONS SECTION 1.0 1.1 1.2 1.3 1.4 1.5 1.6 EXECUTIVE SUMMARY Introduction Brief Background of the Issuer Brief Description of the Project Brief Description of the Project Land Rating Securities Commission’s Approval/Authorisation SECTION 2.0 DESCRIPTION OF THE TRANSACTION AND STRUCTURE OF THE SUKUK MURABAHAH General Description Security Designated Accounts 3 4 4-6 SECTION 3.0 3.1 3.2 3.3 3.4 3.5 CORPORATE INFORMATION ON THE ISSUER Corporate History and Principal Activities Share Capital Shareholding Structure Profile of Directors Profile of the Management (as at 15 October 2014) 7 7 7 8-9 9 SECTION 4.0 CORPORATE INFORMATION ON THE SHAREHOLDERS OF THE ISSUER Corporate Information on the Shareholders and the Ultimate Holding Company of the Issuer (as at 15 October 2014) 2.1 2.2 2.3 4.1 SECTION 5.0 5.1 5.2 5.3 THE PROJECT Overview Profile of Everfine FMS The Existing Bai’ Istisna Facilities SECTION 6.0 6.1 6.2 6.3 6.4 6.5 6.6 6.7 THE CONCESSION AGREEMENT Summary of the Concession Agreement Grant of Concession Concession Period Construction Costs Construction Period Consideration and Payments The Obligations of UniTapah under the Agreement Land Matters Maintenance Works Maintenance Reserve Fund Events of Default Termination and Expropriation Events Force Majeure Reimbursable Costs Amendments Facilities Management Services Agreement 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 1 1 1 2 2 2 10-11 12-15 15-18 18 Concession 19 19 19 19 19 19-20 20 21 21-22 22 23-28 28 29-30 30-31 31 32
8. SECTION 7 .0 7.1 7.2 7.3 INVESTMENT CONSIDERATIONS AND RISK FACTORS Risk Relating to the Issuer Risk Relating to the Sukuk Murabahah Forward Looking Statements SECTION 8.0 8.1 8.2 8.3 INDUSTRY OVERVIEW Overview of the Malaysian Economy Overview of the Construction Market Economic Outlook for 2013/2014 SECTION 9.0 9.1 9.2 9.3 9.4 OTHER INFORMATION Material Litigation Material Contracts Outside the Ordinary Course of Business Related Party Transactions Material Contingent Liabilities and Material Capital Commitments Conflict of Interest 9.5 APPENDICES Appendix I Principal Terms and Conditions of the Sukuk Murabahah Appendix II Audited Financial Statements of the Issuer for the Financial Year Ended 31 December 2013 Appendix III Shariah Pronouncement (The rest of this page has been left blank intentionally) 33-34 34-36 36 37 38 38 39 39 39 39 39-40
9. DEFINITIONS In this Information Memorandum , the following words or expressions shall have the following meanings except where the context otherwise requires: “Authority” - means any governmental, quasi government and/or other statutory authorities, departments, agencies or bodies or any other privatized corporation whose consents or approvals are necessary and/or required to provide the necessary services or amenities to the Project including approvals for the design, drawings, specifications, layout and buildings plans for the Project. “Availability Charges” - means the sub-lease rentals payable to the Issuer by UiTM for the availability of the Facilities and Infrastructure of the Project. After the completion of the construction of the Facilities and Infrastructure of the Project, UiTM will grant a lease of the Land on which the Project is situated to the Issuer and the Issuer will in turn grant a sub-lease to UiTM. The Availability Charges are payable to the Issuer via monthly installments throughout the Maintenance Period in accordance with the Concession Agreement. "Bai’ Istisna Facilities" or “BIS Facilities” - means the Islamic financing facilities granted by BPMB to the Issuer which are more particularly detailed in Section 5.3 of this Information Memorandum. “BNM” - means Bank Negara Malaysia. “Board” - means the board of directors of UniTapah. “BPMB” - means Bank Pembangunan Malaysia Berhad. “Building Maintenance Manual” - means the agreed performances, terms, requirements and response with respect to the provision of the maintenance of the Facilities and Infrastructure in relation to the Project as set out in the Concession Agreement. “Business Day” - means a day (other than Saturday, Sunday and public holidays) on which banks and financial institutions licensed under the Financial Services Act, 2013 or the Islamic Financial Services Act, 2013 are open for business in Kuala Lumpur. “CBHB” - means Crest Builder Holdings Berhad (573382-P). “CBISB” - means Crest Builder International Sdn Bhd (644441-T). “CBSB” - means Crest Builder Sdn Bhd (110330-K). “Central Securities Depository” - means BNM in its capacity as the central securities depository and custodian of the global certificates for the Sukuk Murabahah who, for purposes of carrying out its functions, duties and obligations under the Central Securities Depository and Paying Agency Rules as a central securities depository, has appointed MyClear to act as its agent, and includes its successors in title and assigns and any successors appointed in such capacity. “Central Securities Depository and Paying Agency Rules” means a uniform set of rules and procedures which govern the depository and paying agency services provided by MyClear as agent for BNM in relation to the securities deposited in RENTAS, as modified, revised or substituted from time to time on MyClear. I
10. “Certificate of Acceptance” - means the certificate dated 18 January 2014 issued by UiTM to UniTapah confirming the acceptance of the availability of the Facilities and Infrastructure of the Project. “Concession” - means the concession granted by UiTM to UniTapah in relation to the Project. “Concession Agreement” - means the agreement dated 4 May 2010 entered into between GOM, UiTM and UniTapah (as supplemented by a supplemental concession agreement dated 27 October 2014), and includes any other amendments, variations and/or supplementals made or entered into from time to time. “Concession Expiry Date” - means the last date of the Concession Period. “Concession Period” - means the period of twenty-three (23) years commencing from the date of the Construction Commencement Date or such further period as may be extended and as agreed by UiTM, UniTapah and GOM under the Concession Agreement, during which UniTapah holds the Concession. “Construction Commencement Date” means the date of the commencement of the Construction Works for the Project, i.e. 19 January 2011. “Construction Completion Date” means the date of completion of the Construction Works during the Construction Period, which shall be date of the issuance of the Certificate of Acceptance. “Construction Works” - means the survey, soil investigation, construction, equipping and furnishing, landscaping, installation, testing, commissioning and infrastructure works as required for the Facilities and Infrastructure in accordance with the design concept as approved by UiTM and detailed design as approved by the Authority. “Designated Accounts” - means collectively, the Disbursement Account, the Revenue Account, the Finance Service Reserve Account, the Maintenance Account 1 and the Maintenance Account 2. “Disbursement Account” - means the Shariah-compliant bank account designated as the “Disbursement Account” opened and maintained by the Issuer with a bank acceptable to the Lead Arranger which shall be operated solely by the Security Trustee. “Detik Utuh” - means Detik Utuh Sdn Bhd (722565-A). “Effective Date” - means 19 January 2011. “Equity Portion” - means the Availability Charge less any payment relating to the loan obtained by the Concession Company from the lender as approved by the Government for the purpose of financing the Construction Works. “Everfine FMS” - means Everfine FMS Sdn Bhd (944415-H). “Facility Agent” - means Kenanga Investment Bank Berhad (15678-H). “Facilities and Infrastructure ” - means the fixtures and fittings, equipment and other loose items to be supplied by UniTapah as described under the Concession II
11. Agreement . “Facilities Management Services Agreement” - means the agreement dated 17 March 2014 entered into between UniTapah and Everfine FMS. “FSRA” or “Finance Service Reserve Account” - means the Shariah-compliant bank account designated as the “FSRA” opened and maintained by the Issuer with a bank acceptable to the Lead Arranger, which shall be operated solely by the Security Trustee. “FSRA Minimum Required Balance” - means an amount equivalent to an amount payable in respect of any profit and principal payments of the Sukuk Murabahah for the next six (6) months, until the Sukuk Murabahah are fully repaid. “GOM” or “Government” - means the Government of Malaysia. “Group” - means CBHB and its subsidiaries. “Issue Date” - means the date on which the Sukuk Murabahah is issued, which date shall fall on a Business Day. “Junior Sukuk” - means the subordinated Sukuk of up to RM50.0 million issued or to be issued by UniTapah and subscribed or to be subscribed by CBISB. “KIBB” - means Kenanga Investment Bank Berhad (15678-H). “Land” - means the parcel of land held by UiTM under HS(D) 15461, PT 4740, Mukim Batang Padang, Daerah Batang Padang, Negeri Perak. “Lease Agreement” - means the lease agreement entered or to be entered into between UiTM and the Concession Company in relation to the grant of a lease of the Project Land to the Concession Company, pursuant to the Concession Agreement. “Letter of Appointment” - means the letter of appointment dated 18 January 2014 issued by UniTapah to Everfine FMS for the Maintenance Works of the Infrastructure and Facilities of UiTM by Everfine FMS to UniTapah. “MA2 Minimum Required Balance” - means an amount equivalent to Ringgit Malaysia Five Million (RM5,000,000.00), until the Sukuk Murabahah are fully repaid. “Maintenance Account 1” - means the Shariah-compliant bank account designated as the “Maintenance Account 1” opened and maintained by the Issuer with a bank acceptable to the Lead Arranger which shall be operated solely by the Issuer prior to an event of default under the Sukuk Murabahah. Upon the occurrence and the subsistence of an event of default, the Security Trustee shall be the sole signatory. “Maintenance Account 2” - means the Shariah-compliant bank account designated as the “Maintenance Account 2” opened and maintained by the Issuer with a bank acceptable to the Lead Arranger which shall be operated solely by the Security Trustee. III
12. “Maintenance Charges” - means the amount payable to UniTapah by UiTM for the provision of the Maintenance Works. “Maintenance Expiry Date” - means the date which the Maintenance Works shall be completed at the end of the Maintenance Period. “Maintenance Period” - means the period commencing from the date of the Certificate of Acceptance is issued and expiring on the Concession Expiry Date. “Maintenance Reserve Fund” means the sinking fund established which shall be jointly managed and controlled and shall be held in a separate bank account opened in joint names of UiTM and the Issuer. “Maintenance Works” - means all those works in relation to the maintenance of the Facilities and Infrastructure as are required in accordance with the Building Maintenance Manual during the Maintenance Period. “MyClear” - means Malaysian Electronic Clearing Corporation Sdn. Bhd., a wholly-owned subsidiary of BNM and incorporated in October 2008. “Operational Procedures for RENTAS” - means the Operational Procedures for RENTAS issued by MyClear and as modified or revised or substituted from time to time by MyClear. “Operational Procedures for Securities Services” - means Operational Procedures for Securities Services issued by MyClear and as modified or revised or substituted from time to time by MyClear. “Permitted Investments” - means the following which shall comprise investment products approved by the SC’s Shariah Advisory Council, BNM’s Shariah Advisory Council and/or other recognised Shariah authorities: (a) accounts maintained with a Shariah-compliant financial institution with a minimum credit rating of A3/P1 and/or A+/MARC-1; (b) money market instruments of a Shariah-compliant financial institution with a minimum credit rating of A3/P1 and/or A+/MARC-1; and (c) Islamic treasury bills, Islamic money market instruments, and other Islamic instruments or Sukuk issued by BNM or the Government, subject to the following: (i) The maturity of the Permitted Investments in securities shall fall on a date, which is at least five (5) Business Days before the next Profit Payment Date or the maturity date of the Sukuk Murabahah, whichever is earlier. However, the maturity of the Permitted Investment in money market instruments of a financial institution and accounts maintained with financial institutions shall fall on a date, which is at least two (2) Business Days before the next Profit Payment Date or the maturity date of the Sukuk Murabahah, whichever is earlier save that this condition shall not apply to any placement of money with the Facility Agent; and (ii) the Permitted Investments being denominated in Ringgit. IV
13. “Principal Adviser/ Lead Arranger/Lead Manager” - Kenanga Investment Bank Berhad (15678-H) in their capacity as principal adviser/lead arranger/lead manager of the Sukuk Murabahah. “Profit Payment” - means, in relation to each tranche of the Sukuk Murabahah, the amount of profit portion payable by the Issuer to the Sukukholders in respect of the Sukuk Murabahah on each Profit Payment Date, which amount shall be calculated based on the Profit Rate and on the basis of the actual number of days elapsed and actual number of days in the year (actual/365). “Profit Payment Date” - means, in relation to each tranche of the Sukuk Murabahah, the date for payment of the Profit Payments, being each date falling at the end of consecutive six (6) month commencing from the Issue Date, Provided That subject to the requirements in the Central Securities Depository and Paying Agency Rules, the Operational Procedures for RENTAS, and the Operational Procedures for Securities Services, if the Profit Payment Date would otherwise be a day which is not a Business Day, it shall be the next succeeding Business Day or, if that Business Day falls in the following month, the preceding Business Day and provided further that the last Profit Payment Date in respect of any tranche shall in any event fall on the same day as the maturity date of such tranche. “Profit Rate” - means, in relation to each tranche of the Sukuk Murabahah, the rate per annum which shall be the basis for the calculation of the profit portion payable by the Issuer to the Sukukholders in respect of the Sukuk Murabahah as set out in the relevant certificate in respect of the Sukuk Murabahah. “Project” - means the project to undertake the planning, design, development, construction, landscaping, equipping, installation, completion, testing, commissioning and the maintenance of the Facilities and Infrastructure on Project Land in accordance with the terms of the Concession Agreement. “Project Land” - means part of the Land measuring approximately 76.52 acres which is situated within the parcel of Land. “RENTAS” - means the scriptless book-entries securities trading and funds transfer system known as Real Time Electronic Transfer of Funds and Securities operated by MyClear as varied, upgraded, renamed or substituted from time to time. “RAM Ratings” - means RAM Rating Services Berhad (208095-U). “RPS” - means Redeemable Preference Shares. “Revenue Account” - means the Shariah-compliant bank account designated as the “Revenue Account” opened and maintained by the Issuer with a bank acceptable to the Lead Arranger which shall be operated solely by the Security Trustee. “SC” - means Securities Commission of Malaysia. “Security Trustee Designated Accounts” - means collectively, the Disbursement Account, the Revenue Account, the Finance Service Reserve Account and the Maintenance Account 2. V
14. "Sukukholders" - means the holders of the Sukuk Murabahah. "Sukuk Murabahah" - means the Islamic securities of up to RM600.0 million in nominal value to be issued by UniTapah. “Termination Date” - means the date when the Concession Agreement is terminated in accordance with paragraphs 6.11.1, 6.11.2, 6.12.1 and 6.12.2 herein. "Trustee" or "Security Trustee" - means Pacific Trustees Berhad (317007-A). "Trustees' Reimbursement Account" - means the account designated as "Trustees' Reimbursement Account” for Sukukholders' actions opened and maintained by UniTapah in which a sum of RM30,000.00 from the monies received by UniTapah when the Sukuk Murabahah are issued are to be deposited, as required under the SC’s Trust Deeds Guidelines revised on 12 July 2011 and effective on 12 August 2011. “UiTM” - means Universiti Teknologi MARA. “UniTapah” or “Issuer” or “Concession Company” or “Company” - means UniTapah Sdn Bhd (846665-X). (The rest of this page has been left blank intentionally) VI
15. SECTION 1 .0 1.1 EXECUTIVE SUMMARY Introduction KIBB has been mandated as the Principal Adviser/Lead Arranger/Lead Manager and the Facility Agent by the Issuer for the issuance of the Sukuk Murabahah of up to RM600.0 million. The Sukuk Murabahah shall be a one-time issuance and in tranches with tenure of up to twenty one (21) years. 1.2 Brief Background of the Issuer The Issuer was incorporated under Companies Act, 1965 in Malaysia on 13 February 2009 as a private company limited by shares. The Issuer is a 51% owned subsidiary of CBISB which is a wholly-owned subsidiary of CBHB. CBISB also owns 4,000,000 RPS of RM1.00 each in the Issuer. The remaining 49% shareholding of the Issuer is held by Detik Utuh. UniTapah is the concessionaire for the design, development, construction and completion of the student campus for UiTM in Tapah, Perak. This is constituted under the Concession Agreement. Further more detailed information on the Issuer, please refer to “Section 3.0 – Corporate Information on the Issuer”. 1.3 Brief Description of the Project The Concession Agreement is granted to the Issuer to construct the facilities and infrastructure of the Project and thereafter maintain the facilities and infrastructure of the Project throughout the Concession Period. The Project comprises administration building, faculty buildings, sports complex, multi-purpose hall, library, other ancillary buildings and local infrastructure for 5,000 students. In consideration of the Issuer undertaking the obligations to carry out constructions works under the Concession Agreement, UiTM shall pay the Issuer the Availability Charges as stipulated in the Concession Agreement. The Issuer is also entitled to Maintenance Charges, which covers the provisioning of Maintenance Works specified in the Building Maintenance Manual under the Concession Agreement. Further more details in relation to the Project and Concession Agreement, please refer to “Section 5.0 – The Project” and “Section 6.0 – Concession Agreement”. (The rest of this page has been left blank intentionally) 1|P AGE
16. 1 .4 Brief Description of the Project Land The Project Land, totalling approximately 76.52 acres is held by UiTM and located about 8 km north of Tapah in the direction of Teluk Intan via the old Kuala Lumpur-Ipoh federal trunk road. Under the Concession Agreement, UiTM shall grant UniTapah the right and license to enter and occupy the Project Land to perform Construction Works and Maintenance Works. 1.5 Rating The rating agency, RAM Ratings, had on 24 April 2014 assigned a long-term rating of AA2 to the Sukuk Murabahah. 1.6 Securities Commission’s Approval/Authorisation The Sukuk Murabahah has been authorised by the SC vide the SC’s letters dated 30 May 2014. 2|P AGE
17. SECTION 2 .0 DESCRIPTION OF THE TRANSACTION AND STRUCTURE OF THE SUKUK MURABAHAH 2.1 General Description The Sukuk Murabahah will be issued at par, at a discount or at a premium to the nominal value. The Sukuk Murabahah shall be a one-time issuance and in tranches with tenures of up to twenty-one (21) years, which will be determined by UniTapah and the Principal Adviser/Lead Arranger/Lead Manager prior to the issuance of Sukuk Murabahah. Diagram below illustrates the transaction and structure of the Sukuk Murabahah: Description of the transaction and structure of the Sukuk Murabahah as follows: (1) UniTapah has been awarded the Project by the GOM/UiTM. (2) The Sukuk Murabahah will be issued in a single issuance and in tranches with tenure of up to twenty-one (21) years. (3) The proceeds from the issuance of the Sukuk Murabahah shall be deposited into the Disbursement Account and will be solely operated by the Security Trustee. (4) The proceeds from the issuance of the Sukuk Murabahah will be utilised, amongst others, as follows: (a) (b) (c) to refinance the amount outstanding under the existing BIS Facilities; to repay the advances and other related costs due to its main contractor which is also its related company, CBSB in relation with the Construction Works under the Concession Agreement; (i) to set aside in the FSRA for the purpose of meeting the FSRA Minimum Required Balance; (ii) to set aside in the Revenue Account; and (iii) to set aside in the Maintenance Account 2 for the purpose of meeting the MA2 Minimum Required Balance; and (d) the balance, if any, shall be utilised for 3|P AGE
18. UniTapah ’s Shariah-compliant general corporate purposes which are to defray expenses incurred in relation to the Sukuk Murabahah and to make advances to its shareholders and/or ultimate holding company (“Internal Transfer”). (5) There are two sources of payments received from UiTM pursuant to the Concession Agreement: (a) Availability Charges: The stream of Availability Charges is the main source of repayment for the Sukuk Murabahah and will be deposited by UiTM directly into the Revenue Account set up under this transaction and shall be solely operated by the Security Trustee at all times. (b) Maintenance Charges: In consideration of UniTapah undertaking the obligation to provide Maintenance Works throughout the Maintenance Period, UiTM shall pay UniTapah the Maintenance Charges. The Maintenance Charges will be deposited by UiTM directly into the Maintenance Account 1 and shall be solely operated by the Issuer. The Maintenance Charges will be utilised by UniTapah to defray the expenses incurred in relation to the Maintenance Works. 2.2 Security (i) Debenture evidencing a fixed and floating charge over UniTapah’s present and future assets; (ii) First ranking charge and assignment of the Designated Accounts and the credit balances therein; and (iii) First ranking assignment of takaful policies, if any, in relation to the Concession Agreement with the Security Trustee designated as loss payee/mortgagee, to the extent permitted by prevailing laws. Prior to the discharge of the existing securities under the BIS Facilities, the securities under paragraphs (i) and (iii) above shall rank after the securities created under the BIS Facilities. 2.3 Designated Accounts Disbursement Account The Issuer shall open and maintain a Shariah-compliant bank account designated as “Disbursement Account” in which all proceeds raised from the issuance of Sukuk Murabahah are to be deposited therein. The funds in the Disbursement Account shall be utilised in accordance with Section 2.1 (4) above and as per the Principal Terms and Conditions of the Sukuk Murabahah appended as Appendix I herein. The Disbursement Account shall be operated solely by the Security Trustee. All withdrawals from the Disbursement Account shall be accompanied by relevant supporting documents in form and substance satisfactory to the Security Trustee. The Disbursement Account shall be closed when the funds in the account are fully utilised. 4|P AGE
19. Revenue Account UniTapah shall open and maintain a Shariah-compliant bank account designated as the “Revenue Account” in which the proceeds of the Junior Sukuk and all the payments received from UiTM pursuant to the Concession Agreement (“Concession Payments”) (including Availability Charges but excluding Maintenance Charges and the Maintenance Reserve Fund) and all other income, revenue, takaful proceeds and other proceeds received by UniTapah (including any shareholders’ advances for shortfall for the Availability Charges but excluding any shareholders’ advances for shortfall for providing maintenance services and any compensation received from UiTM under the Concession Agreement) are to be deposited. The Revenue Account will also capture the amount set-aside from the Disbursement Account. Upon the refinancing of the BIS Facilities, all monies remaining in the designated accounts in respect of the BIS Facilities will be transferred and deposited into the Revenue Account and such designated accounts shall be closed when the funds in the accounts are fully transferred to the Revenue Account. Funds in the Revenue Account shall be utilised based on the following order of priority: a) b) c) d) e) f) Tax and other statutory obligations; Administrative expenses of UniTapah including payment of annual recurring fees to the relevant agents/advisers under the Sukuk Murabahah and payment of fees to its auditors and tax agents, up to a maximum of RM1,200,000.00 in any financial year*; Any transfer to the FSRA in order to maintain the FSRA Minimum Required Balance; Profit Payments under the Sukuk Murabahah falling due and payable; Principal payments under the Sukuk Murabahah falling due and payable; and Purchase of the Sukuk Murabahah (if UniTapah so elects) * Note: If the administrative expenses of UniTapah exceeds the maximum of RM1,200,000.00, UniTapah will procure from its shareholder/(s) to fund the excess. The Revenue Account shall be operated solely by the Security Trustee. All withdrawals from the Revenue Account shall be accompanied by relevant supporting documents (in form and substance satisfactory to the Security Trustee). Finance Service Reserve Account The Issuer shall open and maintain a Shariah compliant bank account designated as the “FSRA”. The Issuer shall ensure that the FSRA contains an amount equivalent to an amount payable in respect of any profit and principal payment of the Sukuk Murabahah for the next six (6) months. The FSRA shall be solely operated by the Security Trustee. The Issuer shall at all times thereafter maintain an amount equivalent to an amount payable in respect of any profit and principal payment of the Sukuk Murabahah for the next six (6) months, until the Sukuk Murabahah are fully repaid. Notwithstanding the FSRA Minimum Required Balance, the Issuer can utilise the FSRA for profit and principal payment after fully utilising balance in Revenue Account. In the event that the balance held in the FSRA is less than the FSRA Minimum Required Balance, the shortfall shall be topped up from the Revenue Account. The Issuer shall top up the FSRA so as to comply with the FSRA Minimum Required Balance within thirty (30) days from the date of the balance held in FSRA is less than the FSRA Minimum Required Balance. In the event that the balance held in the FSRA exceeds the FSRA Minimum Required Balance, the excess shall be released to the Revenue Account or any such other 5|P AGE
20. Security Trustee Designated Accounts mutually agreed between the Issuer and the Security Trustee . For the avoidance of doubt, any non-compliance in relation to meeting the FSRA Minimum Required Balance shall constitute an event of default if such non-compliance is not remedied within thirty (30) days from the date of any shortfall in the FSRA to meet the FSRA Minimum Required Balance. Maintenance Account 1 UniTapah shall open and maintain a Shariah-compliant bank account designated as the “Maintenance Account 1” in which Maintenance Charges from UiTM pursuant to the Concession Agreement and the shareholders’ advances for any shortfall (as the case may be) for providing maintenance services are to be deposited. The Maintenance Account 1 shall be solely maintained and operated by the Issuer who shall be the sole signatory of the account prior to an event of default. Upon written notification is being made to the Security Trustee on the occurrence and the subsistence of an event of default, the Security Trustee shall be the sole signatory to operate the Maintenance Account 1. Maintenance Account 2 UniTapah shall open and maintain a Shariah-compliant bank account designated as the “Maintenance Account 2”. The Issuer shall ensure that the Maintenance Account 2 contains an amount equivalent to Ringgit Malaysia Five Million (RM5,000,000.00). The Issuer shall at all times thereafter maintain the MA2 Minimum Required Balance. Notwithstanding the MA2 Minimum Required Balance, the Issuer can utilise the monies in the Maintenance Account 2 to pay for any shortfall in relation to the maintenance services to be provided under the Concession Agreement in the event that there are insufficient funds in the Maintenance Account 1. In the event that the balance held in the Maintenance Account 2 is less than the MA2 Minimum Required Balance, the shortfall shall be topped-up from the Maintenance Account 1 and/or the shareholders’ advances within thirty (30) days from the date when the balance held in Maintenance Account 2 is less than the MA2 Minimum Required Balance, failing which, an event of default would have occurred at the expiry of the thirty (30) day period. The Maintenance Account 2 shall be operated solely by the Security Trustee. All withdrawals from the Maintenance Account 2 shall be accompanied by relevant supporting documents in form and substance satisfactory to the Security Trustee. Monies in any of the Designated Accounts may be invested in Permitted Investments. Funds invested in for Permitted Investments and income received from such Permitted Investments shall be remitted into the Revenue Account or any such other Security Trustee Designated Accounts mutually agreed between the Issuer and the Security Trustee in a timely manner to meet any payment obligations of the Issuer when due and payable. Immediately after the last maturity date of the Sukuk Murabahah and all payment obligations under the Sukuk Murabahah have been fully settled, the Designated Accounts shall be closed and any credit balance shall be transferred to the Issuer. For the terms of the Sukuk Murabahah, please see "Appendix I – Principal Terms and Conditions of the Sukuk Murabahah". 6|P AGE
21. SECTION 3 .0 3.1 CORPORATE INFORMATION ON THE ISSUER Corporate History and Principal Activities UniTapah was incorporated under the Companies Act, 1965 in Malaysia on 13 February 2009 under the Companies Act, 1965 for the sole purpose of undertaking the planning, design, development, construction, landscaping, equipping, installation, completion, testing and commissioning of the facilities on the Project Land and to carry out Maintenance Works of the Facilities and Infrastructure of the Project in accordance with the terms and conditions pursuant to the Concession Agreement. The registered office of the Issuer is located at 14-2, Jalan 4A/27A, Section 2, Wangsa Maju, 53300 Kuala Lumpur while the business address of the Issuer is at Penthouse, The Crest, 3 Two Square, 2, Jalan 19/1, 46300 Petaling Jaya, Selangor Darul Ehsan respectively. UniTapah has no subsidiary or associate company. 3.2 Share Capital The authorised and issued and paid-up share capital of UniTapah as at 15 October 2014 is as follows: (a) Authorised share capital Type of shares No. of shares Ordinary shares RPS 1,000,000 4,000,000 Par Value (RM) 1.00 1.00 1,000,000 4,000,000 Total authorised share capital (b) 5,000,000 Issued and paid-up share capital Type of shares No. of shares Ordinary shares RPS 1,000,000 4,000,000 Par Value (RM) 1.00 1.00 Total (RM) 1,000,000 4,000,000 Total issued and paid-up share capital 3.3 Total (RM) 5,000,000 Shareholding Structure The shareholders of UniTapah as at 15 October 2014 are as follows: Name CBISB Detik Utuh Total No. of ordinary shares held directly 510,000 % of share capital 51.0 No. of RPS held 4,000,000 490,000 49.0 - 1,000,000 100.0 4,000,000 7|P AGE
22. 3 .4 Profile of Directors The directors of the Issuer and their respective profiles as at 15 October 2014 are as follows: Sri Rahayu Binti Tajuddin Chairman Sri Rahayu Binti Tajuddin, 35, a Malaysian, was appointed to the board of directors of UniTapah on 30 October 2013. She is currently the Chairman of the Company. Rahayu graduated with a double Masters of Science in Management from Lancaster University, United Kingdom and Sunway University, Kuala Lumpur in 2013. She has ten (10) years of experience in business administration, sales, operations management, marketing & promotions and strategic planning relating to various industries from education to information science, oil & gas, media & advertising and event management. Her strengths is in business administration that includes strategic planning, project management, marketing and event management. She is currently a director of Detik Utuh Sdn Bhd, Intan Sekitar Sdn Bhd, Landasan Bayu Sdn Bhd and RFC Sdn Bhd. Vignesh Naidu A/L Kuppusamy Naidu Executive Director Vignesh Naidu, 41, a Malaysian, was appointed to the board of directors of UniTapah on 13 February 2009. He is currently the Executive Director of the Company. An Economics & Finance graduate from the University of London, Vignesh has also included a Diploma in Investment Analysis from the Royal Melbourne Institute of Technology in his academic achievements. As a corporate strategist, Vignesh has over fifteen (15) years of experience in corporate finance, private equity and investments. In year 2002, Vignesh formed his own company, f3 Capital Sdn Bhd and has strategically positioned it as an investor and developer, with a focus in unlocking strategic pocket land banks belonging to the government-linked-corporations (GLCs) in Klang Valley. Vignesh is involved in project planning, project financing as well as the implementation of these projects. Vignesh is also a director of f3 Capital Sdn Bhd, Detik Utuh Sdn Bhd, Intan Sekitar Sdn Bhd and Landasan Bayu Sdn Bhd. Tengku Dato’ Sulaiman Shah Bin Tengku Abdul Jalil Shah Executive Director Tengku Dato’ Sulaiman Shah Bin Tengku Abdul Jalil Shah, 57, a Malaysian, was appointed to the board of directors of UniTapah on 1 June 2010. He is currently the Executive Director of the Company. Tengku has over twenty (20) years of experience in the construction, print advertising and sea freight industries. He was appointed the “Orang Besar Istana” in the year 1996 with the bestowed title of “Tengku Setia Selangor”. In the following year, he was also conferred “Dato’ Di Raja Selangor”. He is primarily responsible for the orderly conduct and working of the board of directors and the public relation and communication affairs of the Company. (The rest of this page has been left blank intentionally) 8|P AGE
23. Yong Soon Chow Managing Director Yong Soon Chow , 62, a Malaysian, is the Managing Director of the Company and was appointed to the board of directors of UniTapah on 1 June 2010. Yong graduated from Universiti Malaya with a degree in B. Eng (Hons). Yong started his career as an engineer with Jabatan Kerja Raya from 1977 to 1981. In year 1983, Yong formed his own company, Crest Builder Sdn Bhd and has successfully turned it into a profitable concern. Over the years, Yong has accumulated invaluable experience and in-depth knowledge of civil engineering and construction industry in general from on the job training. Yong is responsible for the overall business operations and the implementation of policies and strategies of the Company. Yong Shang Ming Executive Director Yong Shang Ming (Eric), 31, a Malaysian, was appointed to the board of directors of UniTapah on 1 June 2010. He is currently the Executive Director of the Company. Eric graduated from City University, London in year 2003, with an Honours Degree in Civil Engineering. Eric is involved in the project procurement and implementation as well as the business development ventures. Eric is also involved in project planning, development and marketing operations of the Company. 3.5 Profile of the Management (as at 15 October 2014) Teh Hock Hua Senior Project Director Teh Hock Hua, 41, a Malaysian, graduated from Universiti Malaya, with a Bachelor in Civil Engineering in 1998 with a First Class Honours. Over the years, Teh rose up the ranks being promoted to Project Manager, Senior Project Manager, General Manager, and currently, is the Executive Director of CBSB and is the overall Head of the Construction Division of the Group. Teh is the overall person in charge in the Construction Division, and oversees the day to day operations, including the contracts department, mechanical and electrical, and other departments under the Construction Division. Ir Man Abisuffian Ahmad Project Director Ir Man, 68, a Malaysian, graduated from Universiti Institut Mara with a Bachelor in Mechanical Engineering in 1969. Ir Man was admitted to the Board of Engineers of Malaysia in 1986. Ir Man has been a consultant with KBM Konsult Sdn Bhd most of his working years, and has been serving UiTM as a mechanical and electrical consultant engineer. Ir Man is in charge of the overall development and technical aspects of the Project. (The rest of this page has been left blank intentionally) 9|P AGE
24. SECTION 4 .0 4.1 CORPORATE INFORMATION ON THE SHAREHOLDERS OF THE ISSUER Corporate Information on the Shareholders and the Ultimate Holding Company of the Issuer (as at 15 October 2014) 4.1.1 Crest Builder International Sdn Bhd : 4 March 2004 of : Malaysia share : RM10,000,000.00 divided into 10,000,000 ordinary shares of RM1.00 each : RM2.00 divided into 2 ordinary shares of RM1.00 each Principal activity : Investment holding Directors : 1) Yong Soon Chow 2) Yong Shang Ming 3) Yong Tiok Keng Shareholders and percentage of holdings : CBHB (100%) Date of incorporation Domicile/ place incorporation Authorised capital Issued and paid share capital (RM) 4.1.2 up Crest Builder Holdings Berhad : 9 March 2002 of : Malaysia share : RM500,000,000.00 divided into 500,000,000 ordinary shares of RM1.00 each : RM165,038,875.00 divided into 165,038,875 ordinary shares of RM1.00 each Principal activity : Investment holding Directors : 1) Tengku Dato’ Sulaiman Shah Bin Tengku Abdul Jalil Shah 2) Yong Soon Chow 3) Koh Hua Lan 4) Yong Shang Ming 5) Kam Yong Kan 6) Keong Choon Keat 7) Mohd Khasan Bin Ahmad 8) Yong Tiok Keng Major shareholders and percentage of holdings : Yong Soon Chow (28.8% (direct) and 6.95% (indirect)) Date of incorporation Domicile/ place incorporation Authorised capital Issued and paid share capital up 10 | P AGE
25. 4 .1.3 Detik Utuh Sdn Bhd : 27 January 2006 of : Malaysia share : RM1,000,000.00 divided into ordinary shares of RM1.00 each 1,000,000 Issued and paid up share capital : RM1,000,000.00 divided into ordinary shares of RM1.00 each 1,000,000 Principal activity : Investment holding Directors : 1) Sri Rahayu Binti Tajuddin 2) Vignesh Naidu A/L Kuppusamy Naidu 3) Haniff Bin Dato’ Mahmood Shareholders and percentage of holdings : 1) Sri Rahayu Binti Tajuddin (45%) 2) Obata-Ambak Holdings Sdn Bhd (40%) 3) Vignesh Naidu A/L Kuppusamy Naidu (15%) Date of incorporation Domicile/ place incorporation Authorised capital (The rest of this page has been left blank intentionally) 11 | P AGE
26. SECTION 5 .0 5.1 THE PROJECT Overview As constituted under the Concession Agreement, UniTapah is the concessionaire for the design, development, construction and completion of the student campus for 5,000 students for UiTM in Tapah, Perak. The Project is to be built within a 76.52 acre site located about 8 km north of Tapah in the direction of Teluk Intan via the old Kuala Lumpur-Ipoh federal trunk road. The Project comprises administration building, faculty buildings for accountancy, information technology and applied sciences. Other support buildings include sports complex with a swimming pool, multi-purpose hall, library, surau, staff housing, student hostels, cafeteria, other ancillary buildings and local infrastructure. Based on the Concession Agreement, the Concession Period will last for a period of twenty three (23) years (including a thirty six (36) months construction period). Upon the expiry of the Concession Period, UniTapah shall hand-over the Project to UiTM. The construction cost is partly funded by the BIS Facilities granted by BPMB to UniTapah. Please refer to Section 5.3 for further details in relation to the BIS Facilities. Under the Concession Agreement, the Issuer will be paid Availability Charges and Maintenance Charges throughout the Maintenance Period. (i) Availability Charges In consideration of the Issuer undertaking the obligations to carry out Constructions Works under the Concession Agreement, UiTM shall pay the Issuer the Availability Charges as stipulated in the Concession Agreement. These Availability Charges are payable in arrears on a monthly basis. The first Availability Charge is payable by UiTM to UniTapah one (1) month after the issuance of the Certificate of Acceptance – a certificate confirming UiTM’s acceptance of the availability of the Project. The stream of Availability Charges is the main source of repayment for the Sukuk Murabahah and will be deposited by UiTM directly into the Revenue Account set up under this transaction. The Availability Charges is calculated based on rental rate of RM4.35 per square foot per month (total square feet of the Facilities and Infrastructure is 837,872 square feet), which amounts to RM3,644,743.20 per month. (ii) Maintenance Charges In consideration of the Issuer undertaking the obligation to provide Maintenance Works throughout the Maintenance Period, UiTM shall pay the Issuer the Maintenance Charges. The Maintenance Charges will be utilised by UniTapah to defray the expenses incurred in relation to the Maintenance Works. The Maintenance Charges is calculated based on monthly agreed rate of RM1.146 per square foot per month for the first five (5) years of the Maintenance Period. The Issuer may request a review of Maintenance Charges at the interval of every five (5) years after the start of the Maintenance Period. (The rest of this page has been left blank intentionally) 12 | P AGE
27. Completion of Construction Works The construction of the Facilities and Infrastructure of the Project was completed and accepted by UiTM on 18 January 2014 , evidenced by the issuance of the Certificate of Acceptance by UiTM to UniTapah. With the completion of the Construction Works, UniTapah is now providing Maintenance Works throughout the Maintenance Period. UniTapah had on 17 March 2014 appointed Everfine FMS for the provision of management and maintenance services for the Facilities and Infrastructure of the Project. Administrative Complex Hostel Building 13 | P AGE
28. North view of Administrative Complex Computer Science and Economics Faculties 14 | P AGE
29. Canteen 5 .2 Profile of Everfine FMS Everfine FMS was incorporated under the Companies Act, 1965 in Malaysia on 12 May 2011 as an investment company. Everfine FMS is a 51:49 joint-venture between Everfine Resources Sdn Bhd (“Everfine Resources”) and Global Facilities Management Sdn Bhd (“GFM”). Everfine Resources (formerly known as Pristine Hub Sdn Bhd) has completed many advisory and upgrading of infrastructure developments such as the Paka Residence Resort in Terengganu, the Villa Istana Boutique Hotel in Melaka as well as various government health clinics around Peninsular Malaysia. GFM, on the other hand, specialises in facilities management services. Its vast track record span across notable projects such as Customs Immigration and Quarantine Complex in Johor, The Prime Minister’s Residence Seri Perdana, Menara CIMB at Jalan Raja Laut and Matrade Centre at Jalan Duta. Date of incorporation : 12 May 2011 Domicile/ place of incorporation : Malaysia Authorised share capital : RM100,000.00 divided into 100,000 ordinary shares of RM1.00 each Issued and paid up share capital (RM) : RM1,000.00 divided into 1,000 ordinary shares of RM1.00 each Principal activity : Investment holding Directors : 1) 2) 3) 4) Shareholders and percentage of holdings : 1) Everfine Resources Sdn Bhd (51%) 2) Global Facilities Management Sdn Bhd (49%) Mohammad Shahrizal Bin Mohammad Idris Zainal Bin Amir Haniff Bin Dato’ Mahmood Mohd Hazrin bin Abd Hamid 15 | P AGE
30. Track Record of Everfine FMS Client Contract Value (RM million) Commencement and Completion Date Facility Management Services of Universiti Teknologi MARA (UiTM) Kampus, Tapah, Perak UniTapah Sdn Bhd 160.0 2013 – 2032 (20 years) Perumahan Generasi Baharu FELDA (PBGF) secara IBS yang mengandungi 239 unit di Felda Bukit Jalor, Tampin, Negeri Sembilan FELDA/LSAB IBS Sdn Bhd 28.63 September 2013 – June 2014 Perumahan Generasi Baharu FELDA (PBGF) secara IBS yang mengandungi 300 unit di Felda Bukit Rokan Utara, Tampin, Negeri Sembilan FELDA/LSAB IBS Sdn Bhd 36.839 February 2014 – February 2015 Perumahan Generasi Baharu FELDA (PBGF) secara IBS yang mengandungi 540 unit di Felda Maokil 1 &2, Labis, Johor FELDA/LSAB IBS Sdn Bhd 71.039 February 2014 – February 2015 Project Membaiki dan Menaiktaraf Fasiliti Klinik-klinik Kesihatan, Kementerian Kesihatan Malaysia (KKM) - fasa 1 Bahagian Perkhidmatan Kejuruteraan, Kementerian Kesihatan Malaysia 98.0 May 2010 Advisory and Consultancy for the Development of Universiti Teknologi MARA (UiTM) Kampus, Tapah, Perak, Darul Ridzuan UniTapah Sdn Bhd 2.40 December 2010 June 2013 Project Title On-going Projects Completed Projects 16 | P AGE
31. Track Record of Global Facilities Management Sdn Bhd Client Contract Value (RM million) Commencement and Completion Date Comprehensive Building Maintenance Management at Customs, Immigration & Quarantine Complex, Johor Bahru Jabatan Kerja Raya Wilayah Persekutuan 132.932 December 2013 – May 2018 Operations and Maintenance at Menara Bumiputera Commerce, Jalan Raja Laut, Kuala Lumpur CIMB Group 2.160 January 2013 – December 2015 Operations and Maintenance at Bank Negara Malaysia Recovery Centre Bank Malaysia Negara 3.518 October 2013September 2017 Facility Management Services for BNM Data Centre Cyberjaya Bank Malaysia Negara 2.534 October 2013September 2017 Integrated Facility Management Services at 3C6, Putrajaya TRW Boulevard Square Sdn Bhd 3.560 July 2011 – June 2014 Facilities Management Services at Menara Matrade Matrade 8.590 January 2014 – December 2015 Integrated Building System at UiTM Tapah UniTapah Sdn Bhd 137.760 January 2014 – December 2033 The Privatisation of Facility Management Services at International Islamic University International Islamic University, Malaysia 86.100 January 2002 – December 2006 Comprehensive Facility Maintenance Management Services at Federal Government Office, Complex, Parcel D Putrajaya Service Master (M) Sdn Bhd 12.055 October 2002 – October 2005 Comprehensive Facility Management Services at Federal Government Jabatan Kerja Raya Wilayah Persekutuan 12.345 October 2002 – September 2005 Project Title On-going Projects Completed Projects 17 | P AGE
32. Office , Complex, Parcel C Putrajaya 5.3 Comprehensive Building Maintenance Management at Custom, Immigration, Quarantine Complex, Johor Bahru Advance Maintenance Precision Management Bhd Comprehensive Building Maintenance Management at Custom, Immigration, Quarantine Complex, Johor Bahru Advance Maintenance Precision Management Bhd Facilities Management Services at Menara Martrade Matrade Operations and Maintenance at Bank Negara Malaysia Recovery Centre Bank Malaysia 13.164 October 2005September 2008 200.750 June 2007 – May 2012 25.620 June 2012May 2013 12.094 June 2013 – November 2013 8.00 January 2012 – December 2013 1.429 October 2010October 2013 Sdn Sdn Negara The Existing Bai’ Istisna Facilities The details of the said BIS Facilities are as follows:Financier : Bank Pembangunan (“BPMB”) Malaysia Berhad BIS Facility 1 amount : RM256,397,107.00 BIS Facility 2 amount : RM6,409,928.00 Date of agreement : 27 October 2010 Purpose of Financing – BIS Facility 1 : To part finance the construction of the Project Purpose of Financing – BIS Facility 2 : To part finance the incidental cost relating to the Project (including but not limited to stamp duties, legal fees, processing fees, advisory fees, independent consultant engineer fees and project management consultant fees) Estimated outstanding principal amount as at 15 October 2014 for BIS Facility 1 : RM255,484,002.80 Estimated outstanding principal amount as at 15 October 2014 for BIS Facility 2 : RM6,409,927.81 Financing Tenure : Fifteen (15) years 18 | P AGE
33. SECTION 6 .0 6.1 THE CONCESSION AGREEMENT Summary of the Concession Agreement The following sections incorporate the key terms and conditions contained in the Concession Agreement dated 4 May 2010 entered into between GOM, UniTapah (as the Concession Company) and UiTM (collectively, the “Parties”). A supplemental concession agreement has also been entered into between the Parties on 27 October 2014. 6.2 Grant of Concession The Concession Agreement provides that subject to the terms and conditions of the Concession Agreement, UiTM grants to the Concession Company, the rights and authority:(a) to carry out the Project; and (b) to carry out all works in relation to the maintenance of the Facilities and Infrastructure of the Project in accordance with the Building Maintenance Manual during the Maintenance Period, and the Concession Company accepts the grant of the Concession at its own risk, cost and expense. 6.3 Concession Period Subject to the terms and conditions of the Concession Agreement, the Concession Period shall be for a period of twenty three (23) years commencing from the Construction Commencement Date or the Effective Date whichever is later and ending on the anniversary date of the twenty three (23) years. 6.4 Construction Costs The Parties to the Concession Agreement agree that the total construction cost for the Construction Works is Ringgit Malaysia Two Hundred Eighty Four Million Eight Hundred Eighty Five Thousand Six Hundred and Seventy Five (RM284,885,675.00). 6.5 Construction Period The Concession Agreement provides that the period of construction and completion of the Facilities and Infrastructure of the Project is within thirty six (36) months from the Construction Commencement Date or any extended period thereof. 6.6 Consideration and Payments In consideration of the Concession Company completing the Construction Works of the Project and subject to the terms and conditions of the Concession Agreement, UiTM shall pay to the Concession Company the Availability Charges. After the completion of the construction of the Facilities and Infrastructure of the Project, UiTM will procure a grant of lease of the Land on which the Project is situated to the Issuer and the Issuer will in turn grant a sub-lease to UiTM. The Availability Charges are payable until the expiry of the Concession Period. 19 | P AGE
34. Apart from Availability Charges , in consideration of the Issuer undertaking the obligation to provide maintenance works throughout the Maintenance Period, UiTM shall pay the Issuer the Maintenance Charges. The Concession Agreement provides that each monthly payment of the Availability Charges shall be made by UiTM within thirty (30) days from the date of receipt of the invoice submitted by the Concession Company. In respect of the maintenance of the Facilities and Infrastructure of the Project, the Issuer will be paid the Maintenance Charges by way of monthly payments in arrears. The Maintenance Charges are payable until the expiry of the Concession Period. The Concession Agreement provides that UiTM shall be entitled to set-off by deducting any money owing from the Concession Company to UiTM under the Concession Agreement from any sum which may become due or is payable to the Concession Company including but not limited to the Equity Portion and the Maintenance Charges, PROVIDED THAT this provision shall not affect any other remedy to which UiTM may be entitled for the recovery of such sums. 6.7 The Obligations of UniTapah under the Concession Agreement The Concession Company shall at its own risk, costs and expenses: (a) carry out and complete the Construction Works at its sole risk: – (i) in accordance with the terms and conditions of the Concession Agreement by the Construction Completion Date; and (ii) in strict compliance with all applicable laws, rules and regulations of all the relevant authority having jurisdiction over the Facilities and Infrastructure of the Project; (b) throughout the Maintenance Period, to be responsible to carry out the Maintenance Works in accordance with the acceptable current building practices and the Building Maintenance Manual as set out in the Concession Agreement; (c) submit monthly progress reports of the Construction Works to UiTM; and (d) submit the maintenance progress reports quarterly to UiTM within thirty (30) days from 1st January, 1st April, 1st July and 1st October of the respective years throughout the Maintenance Period. (The rest of this page has been left blank intentionally) 20 | P AGE
35. 6 .8 Land Matters Access Prior to and During Construction Period (a) From the Effective Date until the Construction Commencement Date of the Project and subject to receipt of prior notice in writing from the Concession Company, UiTM shall grant to the Concession Company the right and license to enter and occupy to the Project Land in order for the Concession Company to perform initial works, survey and soil test on the Project Land. (b) From the Construction Commencement Date of the Project until the issuance of the Certificate of Acceptance, UiTM shall grant to the Concession Company the right and license to enter and occupy the Project Land solely for the purposes of carrying out and complete the Construction Works. (c) The rights granted under paragraphs (a) and (b) above shall not confer upon the Concession Company any proprietary right, title or interest in or over any part of the Project Land. (d) the Concession Company shall at its own cost and expenses protect and maintain the Project Land and be responsible for the maintenance (including removing debris and providing proper drainage) of the Project Land until the completion of the Construction Works to the intent that the same shall at all times be kept safe and clean. Access During the Maintenance Period 6.9 (a) Upon the issuance of the Certificate of Acceptance by UiTM accepting the Facilities and Infrastructure of the Project, UiTM shall procure within thirty (30) days from such date, to grant a lease of the Project Land to the Concession Company and the Concession Company shall accept the grant of the said lease in accordance with the terms set forth in the Concession Agreement. UiTM and the Concession Company agreed that the effective date of the lease shall commence on the date of the said Certificate of Acceptance (the “Lease Commencement Date”). (b) Simultaneously with the execution of a lease of the Project Land pursuant to paragraph (a), the Concession Company shall grant a sub-lease on such lease to UiTM and UiTM shall accept the grant of the said sub-lease on such lease commencing one (1) day after the Lease Commencement Date. (c) The period of the lease under the lease agreement and the sub-lease agreement shall be co-terminus with the Concession Period. Upon the expiry of the sub-lease pursuant to paragraph (b), the Concession Company shall surrender the Facilities and Infrastructure of the Project to UiTM, free of encumbrances, and at no cost and expenses to UiTM. (d) For the purpose of carrying out the Maintenance Works, UiTM shall grant to the Concession Company the right and license to enter upon the Facilities and Infrastructure of the Project solely for the purposes of the carrying out of Maintenance Works. Maintenance Works The Concession Agreement provides that upon the issuance of the Certificate of Acceptance by UiTM confirming acceptance of the availability of the Facilities and Infrastructure of the Project, the Concession Company shall throughout the 21 | P AGE
36. Maintenance Period perform the Maintenance Works which shall also include all mechanical and electrical installations and refurbishment as specified in the Building Maintenance Manual . The Concession Company shall, in accordance with the Concession Agreement, perform the Maintenance Works to optimise the functioning, availability, capacity and efficiency of the Facilities and Infrastructure of the Project and undertake not to cause any interference, obstruction or disruption to the operations of UiTM. 6.10 Maintenance Reserve Fund (a) UiTM and the Concession Company shall establish a sinking fund to be known as the Maintenance Reserve Fund which shall be jointly managed and controlled and shall be held in a separate bank account opened in the joint names of UiTM and the Concession Company (“Maintenance Reserve Fund Account”). The Maintenance Reserve Fund is intended to hold the Maintenance Charges for the purposes as set out in paragraph 6.10(e) below. (b) The basis, key assumptions, method of calculation of the agreed contribution to the Maintenance Reserve Fund are set out in the Concession Agreement. (d) UiTM shall deduct the Maintenance Changes amount calculated based on the method referred to in the Concession Agreement and shall deposit the same into the Maintenance Reserve Fund Account within thirty (30) days after receiving the invoice for the Maintenance Charges from the Concession Company. (e) The Maintenance Reserve Fund may be withdrawn and utilised by the Concession Company solely for the purposes of (i) replacement of whole plants, machinery and equipment of the Facilities and Infrastructure having reached its recommended life span, beyond economic repair (which cost of repair is more than 70% of the new purchase price), obsolesces or as required under any laws of Malaysia; (ii) replacement of parts, sub-assemblies of plants, machinery, equipment of Facilities and Infrastructure of the Project having reached its recommended life span due to wear and tear or unscheduled failure as set out in the Building Maintenance Manual; and (iii) replacement, refurbishment, remedial works or making good to architectural, civil and structural of the Facilities and Infrastructure having reached its life-span or aging, wear and tear, damages or descent in visual appearance, and the withdrawal of the Maintenance Reserve Fund shall be in accordance with the procedure set out in the Concession Agreement. (f) In the event that UiTM fails or refuses to approve the use of the Maintenance Reserve Fund in accordance with the procedure set out in the Concession Agreement, the Concession Company shall not be held responsible for the obligations of that particular Asset Management Programme (as defined in the Concession Agreement) as set out in the Building Maintenance Manual. (g) Upon the expiry of the Concession Period, the Concession Company shall be entitled to the balance of the Maintenance Reserve Fund provided always that the Concession Company shall make good any defect of the Facilities and 22 | P AGE
37. Infrastructure of the Project identified during the joint inspection conducted in accordance with the Concession Agreement . 6.11 Events of Default 6.11.1 Events of Default by UiTM If UiTM fails:– (a) to perform or fulfil any of its obligations which adversely affects the Project; or (b) to make payment to the Concession Company for the Availability Charges and/or Maintenance Charges or any part thereof when it is due and payable by UiTM to the Concession Company under the Concession Agreement, then the Concession Company may issue to UiTM a notice specifying the default and requiring UiTM to remedy the same within the period specified therein, taking into account the nature of the remedy to be carried out by UiTM, or such other period as may be agreed by both parties from the date of receipt of such notice. If UiTM fails to remedy the default specified in the notice within the stipulated time therein or such other period as may be agreed by both parties, the Concession Company may, by written notice to UiTM terminate the Concession Agreement which shall take effect thirty (30) days after the date of such written notice. In the event the Concession Agreement is terminated: (a) all lease agreement and sub-lease agreements entered between UiTM and the Concession Company shall automatically be terminated and the Project Land shall revert to UiTM without any cost to UiTM; (b) UiTM shall: (c) (i) not later than six (6) months after the date of termination of the Concession Agreement pay to the Concession Company the present value of the Availability Charges for the remaining unexpired Concession Period discounted at the weighted average cost of capital of the Concession Company as at the date of termination of the Concession Agreement less the amount which may be owed by the Concession Company to UiTM under the Concession Agreement as at the date of termination of the Concession Agreement; (ii) pay to the Concession Company the Availability Charges and/or Maintenance Charges which is due and payable by UiTM to the Concession Company as at the date of termination of the Concession Agreement; (iii) be entitled to utilise the Facilities and Infrastructure of the Project for its own benefit; and The Concession Company shall:(i) terminate all third parties contracts entered into by the Concession Company in relation to Maintenance Works; (ii) hand over to UiTM the as-built drawings, plans, drawings, specification and other relevant documents relating to the Construction Works at no costs to UiTM; 23 | P AGE
38. (d) (iii) vacate and hand over any part of the Facilities and Infrastructure of the Project in the possession of the Concession Company at no cost and expenses to UiTM in a well-maintained condition, fair wear and tear excepted; (iv) make good any defect thereto identified during the joint inspection (conducted in accordance with the Concession Agreement) of the Facilities and Infrastructure of the Project carried out within six (6) months from the date of termination of the Concession Agreement. If the Concession Company fails to make good any such defect UiTM may do so and all costs and expenses incurred by UiTM in doing so shall be a debt due from the Concession Company to UiTM and where applicable, deductible from any amount payable by UiTM the Concession Company under the Concession Agreement PROVIDED THAT this provision shall not affect any other remedy to which UiTM may be entitled for the recovery of the debt; and (v) be entitled to the balance in the Maintenance Reserve Fund (see paragraph 6.10 above for details); and The Concession Company shall not be entitled to claim any cost, expenses, losses including loss of profit, damages or compensation other than stipulated in the Concession Agreement. 6.11.2 Events of Default by the Concession Company 6.11.2.1 Default Prior to Construction Commencement Date If the Concession Company – (a) fails to commence the Commencement Date; or Construction Works on the Construction (b) breaches any of its obligations or fails to comply with any other provisions under the Concession Agreement, then UiTM shall be entitled to give notice in writing (hereinafter referred to as the “Default Notice”) to the Concession Company specifying the relevant default and requiring the Concession Company to remedy the default within a period specified in the Default Notice taking into account the nature of the remedy to be carried out (“Remedy Period”). If the Concession Company fails to remedy the relevant default within the Remedy Period or such other period as may be determined by UiTM, UiTM shall have the right to terminate the Concession Agreement with immediate effect by giving notice to that effect to the Concession Company. If the Concession Agreement is terminated by UiTM pursuant to the abovementioned scenarios: (a) the right and licence granted to the Concession Company to enter upon the Project Land shall expire; (b) UiTM shall be entitled to appoint another party for the purpose of carrying out and completing the Construction Works on such terms and conditions as UiTM may deem fit; and (c) the Concession Company shall – 24 | P AGE
39. (i) at no cost and expenses to UiTM, vacate and remove all of its employees, servants, agents and its equipment, machinery, plants and materials from the Project Land within thirty (30) calendar days from the Termination Date; (ii) hand over vacant possession of the Project Land, in a well-maintained condition, fair wear and tear excepted; (iii) reimburse UiTM for any cost and expenses (including any incidental cost and expenses) paid, incurred or reimbursed by UiTM arising from such default including the actual cost and expenses incurred by UiTM in having to complete the Construction Works in excess of the cost and expenses which would have been incurred by the Concession Company in completing the Construction Works; (iv) hand-over to UiTM the all plans, designs and drawings for the Facilities and Infrastructure at no cost and expenses to UiTM; and (v) not be entitled to claim any cost, expenses, and losses including loss of profit, damages or compensation. 6.11.2.2 Default during Construction Period If at any time during the Construction Period the Concession Company:(a) fails to carry out the Construction Works in accordance with the design concept, detailed design concept, approved plan and the provisions of the Concession Agreement; (b) suspends or abandon the whole Construction Works or any part thereof for a continuous period of thirty (30) calendar days: (c) fails to complete the Construction Works on the Construction Completion Date or any extension allowed by UiTM in accordance with the Concession Agreement; (d) is in breach of any of its obligations or fails to comply with or perform any of the terms and conditions on the Concession Agreement, then UiTM shall be entitled to give the Default Notice to the Concession Company specifying the relevant default and requiring the Concession Company to remedy the default within the Remedy Period. If the Concession Company fails to remedy the relevant default within the Remedy Period or such other period as may be determined by UiTM or a substituted entity is not appointed (as per the Concession Agreement), UiTM shall have the right to terminate the Concession Agreement with immediate effect by giving notice to that effect to the Concession Company. If the Concession Agreement is terminated by UiTM pursuant to the abovementioned scenarios: (a) the right and licence granted to the Concession Company to enter upon the Project Land shall expire; (b) UiTM shall be entitled to appoint another party for the purpose of carrying out and completing the Construction Works on such terms and conditions as UiTM may deem fit, and 25 | P AGE
40. (c) The Concession Company shall(i) cease Construction Works immediately; (ii) within thirty (30) days of the Termination Date, vacate and remove from the Project Land all of its equipment, materials, machineries and its employees, workmen, servants, agents, contractors, and subcontractor at no cost and expenses to UiTM; (iii) hand over vacant possession of the Project Land, in a well-maintained condition, fair wear and tear expected; (iv) hand over to UiTM all plans, designs drawings, specification and other documents relating to the Construction Works at no cost to UiTM; (v) terminate all third parties contracts entered by the Concession Company in relation to the Construction Works; (vi) pay to UiTM not later than six (6) months after the Termination Date, any costs and expenses (including any incidental costs and expenses) paid or incurred by UiTM arising from such default including actual costs and expenses incurred by UiTM in having to complete the Construction Works in excess of the costs and expenses which would have been incurred by the Concession Company in completing the Construction Works; and (vii) not be entitled to any cost, expenses and losses including loss of profit, damages or compensation. 6.11.2.3 Default during Maintenance Period If, at any time during the Maintenance Period, the Concession Company(a) fails to provide the Maintenance Works; (b) fails to achieve the agreed service level specified in the statement of compliance as set out in the Building Maintenance Manual; (c) caused the lease agreement and sub-lease agreement to be terminated due to its default under the said agreements; (d) is in breach of any of its obligations or fails to comply with any provisions under the Concession Agreement, then UiTM shall be entitled to give the Default Notice to the Concession Company specifying the relevant default and requiring the Concession Company to remedy the default within the Remedy Period. If the Concession Company fails to remedy the relevant default within the Remedy Period or such other period as may be determined by UiTM, UiTM shall have the right to terminate the Concession Agreement with immediate effect by giving notice to that effect to the Concession Company. If the Concession Agreement is terminated by UiTM pursuant to the abovementioned scenarios: (aa) all lease agreement and sub-lease agreement entered between UiTM and the Concession company shall automatically be terminated and the Project Land shall revert back to UiTM without any cost to UiTM; 26 | P AGE
41. (bb) (cc) (dd) UiTM shall – (i) be entitled to utilise the Facilities and Infrastructure for its own benefit; (ii) within six (6) months from the Termination Date pay to the Concession Company outstanding amount relating to the financing or refinancing of the Construction Costs which has been approved by the Government; and (iii) be entitled to all monies in the Maintenance Reserve Fund; and the Concession Company shall – (i) be deemed to have given the mandate to UiTM to utilise all monies in the Maintenance Reserve Fund; (ii) make good any defect thereto identified during the joint inspection (conducted in accordance with the Concession Agreement) of the Facilities and Infrastructure, six (6) months from the Termination Date PROVIDED THAT the right and license is granted to the Concession Company to enter the Project Land. If the Concession Company fails to make good any such defect, UiTM may do so and all costs and expenses incurred by UiTM in doing so shall be a debt due from the Concession Company to UiTM and where applicable, deductible from any amount payable by UiTM to the Concession Company under the Concession Agreement or Maintenance Reserve Fund PROVIDED THAT this provision shall not affect any other remedy to which UiTM may be entitled for the recovery of the debt; (iii) pay to UiTM all losses, costs, expenses, damages or penalties incurred by UiTM arising directly or indirectly from such default; (iv) terminate all third parties contracts entered by the Concession Company in relation to the Maintenance Works; (v) hand over to UiTM as the as-built drawings, plans, drawings, specification and other relevant documents relating to the Facilities and Infrastructure at no costs to UiTM; and (vi) vacate and hand over any part of the Facilities and Infrastructure in the possession of the Concession Company at no costs and expenses to UiTM in a well-maintained condition, fair wear and tear excepted; and the Parties hereby agree that the Concession Company shall not be entitled to claim any cost, expenses, and losses including loss of profit, damages or compensation other than stipulated in paragraph 6.11.2.3(bb)(ii). The Parties further agree that the payment made by UiTM under paragraph 6.11.2.3(bb)(ii) shall constitute as a full and final settlement between the Parties. 6.11.2.4 General Defaults If at any time after the execution of the Concession Agreement, the Concession Company– (a) is subject to an order made against it or a resolution passed for the winding up of the Concession Company (except for the purpose of reconstruction, amalgamation not involving the realization of the assets which the interest of creditors are protected); 27 | P AGE
42. (b) enters into liquidation or receivership whether compulsorily or voluntarily of suffers its goods to be taken in execution or become insolvent or compounds with or makes assignment for the benefits of its creditors or does any act which affects its ability to fulfill its obligations under the Concession Agreement; (c) execution is levied against a substantial portion of the Concession Company’s assets, unless it has instituted proceedings in good faith to set aside such execution, then UiTM shall have the right to terminate the Concession Agreement with immediate effect by giving notice to that effect. If the Concession Agreement is terminated by UiTM pursuant to the abovementioned scenarios – (a) takes effect prior to the Construction Commencement Date, the provisions of paragraph 6.11.2.1 shall apply; (b) takes effect during the Construction Period, paragraph 6.11.2.2 shall apply; (c) during the Maintenance Period, paragraph 6.11.2.3 shall apply. 6.11.2.5 Rights and Liabilities upon Termination The termination of the Concession Agreement shall not affect the rights and liabilities of the Parties which have accrued as at the Termination Date. All liabilities, obligations, claims, suits or proceeding whatsoever existing prior to and as at the Termination Date, whether arising out of or in connection with the Project relating to – (a) any agreement entered into by the Concession Company in respect of its obligations under the Concession Agreement; or (b) any act, default, omission or negligence of the Concession Company, its employees, agents or servants, shall be borne by the Concession Company and UiTM shall not be liable for any of the actions aforesaid, PROVIDE ALWAYS that the termination of the Concession Agreement shall not affect the liabilities of any of the Parties for any of their acts or omissions during the Construction Period and each of the Parties shall thereafter continue to be so liable and shall keep the other Party indemnified and held harmless in respect of any claims therefrom. 6.12 Termination and Expropriation Events 6.12.1 Without prejudice to any other rights of the Government, if the Concession Company, its personnel, servants, agents or employees is convicted by a court of law for corruption or unlawful or illegal activities in relation to the Concession Agreement or any other agreement that the Concession Agreement may have with the Government, the Government shall be entitled to terminate the Concession Agreement at any time, by giving immediate written notice to that effect to the Concession Company. 6.12.2 Notwithstanding any provision in the Concession Agreement, the Government may at any time, terminate the Concession Agreement by expropriating the rights vested in the Concession Company under the Concession Agreement by giving not less than three (3) months written notice to that effect to the Concession Company if the Government 28 | P AGE
43. considers that such expropriation is in the national or public interest or national security . The determination of what amounts to “national interests” and “national security” shall be made by the Government and such determination shall be conclusive and binding. 6.13 Force Majeure 6.13.1 Events Neither the Government, UiTM nor the Concession Company shall be in breach of its obligations under the Concession Agreement if it is unable to perform or fulfil any of its obligations under the Concession Agreement or any part of them as a result of the occurrence of an Event of Force Majeure. An “Event of Force Majeure” shall mean an event, not within the control of the party affected, which that party is unable to prevent, avoid or remove, and shall mean: (a) war (whether declared or not), hostilities invasion, act of foreign enemies, insurrection, revolution, rebellion, military or usurped power, civil war or acts of terrorism; (b) ionising radiation or contamination by radioactivity from any nuclear waste, from combustion of nuclear fuel, radioactive toxic explosive, or other hazardous properties of any explosive, nuclear assembly or nuclear thereof; (c) pressure waves caused by aircraft or other aerial devices travelling, at sonic or supersonic speeds; (d) natural catastrophe including but not limited to earthquakes, floods and subterranean spontaneous combustion or any operation of the force of nature, lightning and exceptionally inclement weather; (e) riot, commotion and disorders, criminal damage, sabotage, strike, lock out, labour unrest or other industrial disturbances (affecting the performance of the Concession Agreement) which are not the fault of the Concession Company or its contractors, the Government or UiTM, which causes, or can reasonably be expected to cause any party to fail to comply with its obligations, PROVIDED THAT an Event of Force Majeure shall not include economic downturn, non-availability of or insufficient funds or lack of financing on the part of the Concession Company, to perform its obligations under the Concession Agreement. 6.13.2 Notification of Force Majeure If any Event of Force Majeure occurs by reasons of which any of the parties to the Concession Agreement is unable to perform any of its obligations under the Concession Agreement, that party so affected shall immediately notify the other in writing of the occurrence of any Event of Force Majeure applicable to its obligations under the Concession Agreement giving full details thereof and measures being taken by the party so affected to reduce the severity of such event and subsequently the cessation of such event. If any party does not agree that an Event of Force Majeure has occurred then the dispute shall be dealt with pursuant to dispute resolutions provisions in the Concession Agreement. 6.13.3 Termination by Force Majeure If an Event of Force Majeure has occurred and any party reasonably considers such Event of Force Majeure applicable to it to be of such severity or to be continuing for a 29 | P AGE
44. period of more than six (6) months, then the parties to the Concession Agreement may mutually terminate the Concession Agreement. 6.13.4 Consequences of Termination due to Event of Force Majeure If the Concession Agreement is terminated pursuant to paragraph 6.13.3 above, all rights and obligations hereunder shall forthwith terminate and neither party shall have a claim against each other save and except in respect of any antecedent breach. 6.13.5 Delay (a) PROVIDED THAT the party affected by the Event of Force Majeure has complied with the requirement to provide notice in accordance with paragraph 6.13.2, the party affected by the Event of Force Majeure shall not be liable for any delay in performing its obligation under the Concession Agreement to the extent that such delay has been caused by one or more of Event of Force Majeure and the time for completion of any obligation under the Concession Agreement and the Concession Period shall be extended by the amount of delay caused by such Event of Force Majeure. If the parties to the Concession Agreement do not agree as to the duration of the delay, the disagreement shall be dealt with pursuant to dispute resolutions provisions in the Concession Agreement. (b) Notwithstanding paragraph (a) above, if the continuing occurrence of an Event of Force Majeure is of such severity that it frustrates the original intention and objective of the parties to the Concession Agreement, the parties to the Concession Agreement shall forthwith take steps to discuss the circumstances and the consequences of such event and shall consider how best to achieve the objectives and shall, if appropriate, give consideration to any amendment of the Concession Agreement and the terms and conditions of such amendments. 6.13.6 Restoration Notwithstanding any other provision in the Concession Agreement, if an Event of Force Majeure occurs and the Concession Agreement is not terminated then in any case where the Project or any thereof has been destroyed or substantially damaged, the Concession Company shall restore such damaged parts of the Project to the condition in which it was immediately prior to the occurrence of that Event of Force Majeure at its own expenses. Where as a result of such restoration the Concession Company is able to demonstrate that it has incurred substantial costs affecting the Project, the Concession Company may apply to UiTM for an extension of the Construction Completion Date or the Concession Period as the case may be. 6.13.7 Insurance Notwithstanding any other clause in the Concession Agreement, the Concession Company may wherever reasonably practicable ensure insurance is effected to cover the occurrence of Events of Force Majeure, PROVIDED THAT such Events of Force Majeure are reasonable and practicably insurable. 6.14 Reimbursable Costs 6.14.1 Costs and expenses for the purposes of the Concession Agreement shall be borne by the Concession Company. 30 | P AGE
45. 6 .14.2 Notwithstanding paragraph 6.14.1 above, UiTM shall reimburse the Concession Company the cost of stamp duties relating to the Concession Agreement, the Lease Agreement and the financing agreement and any other cost incurred in relation to or for the purpose of implementation of the Concession Agreement, consisting of the Concession Company’s solicitors’ legal fees, cost of loan, processing fees, financial and tax advisory fees, independent consultant engineer fees and project management consultant fees, provided always that the total reimbursable cost shall not exceed 2.5% of the Construction Cost. 6.14.3 The amount to be reimbursed under this paragraph shall be paid by UiTM to the Concession Company in one single payment within one (1) year from the Maintenance Commencement Date subject to the receipt of invoice and proof of payment by the Concession Company. 6.15 Amendments No amendment or modification shall be valid or binding upon the parties to the Concession Agreement unless it is made in writing by way of supplementary agreement specifically referring to the Concession Agreement and duly signed by the parties to the Concession Agreement or its duly authorised representatives. The provision in respect of such amendment, variation or modification thereof shall be supplemental to and read as an integral part of the Concession Agreement which shall remain in full force and effect as between the parties to the Concession Agreement. (The rest of this page has been left blank intentionally) 31 | P AGE
46. 6 .16 Facilities Management Services Agreement UniTapah has on 17 March 2014 entered into a Facilities Management Services Agreement with Everfine FMS where Everfine FMS has been appointed to provide Maintenance Work as required pursuant to the Concession Agreement. The salient terms of the Facilities Management Services Agreement are as follows:Contract period Payment obligation to Everfine FMS Everfine FMS’s obligations : Twenty (20) years. : Everfine FMS will be paid monthly by UniTapah for providing the Maintenance Works. The monthly payment to Everfine FMS is based on the monthly Maintenance Charges received by UniTapah under the Concession Agreement less 10%. : The monthly payment to Everfine FMS will be made upon UniTapah receiving the monthly Maintenance Charges under the Concession Agreement from UiTM. 1) To carry out the Maintenance Works throughout the Maintenance Period in accordance with the acceptable current building practices and the Building Maintenance Manual; 2) To submit maintenance progress reports quarterly to UniTapah and/or UiTM within thirty (30) days from 1st January, 1st April, 1st July and 1st October of the respective years throughout the Maintenance Period in accordance with the requirements of the Buildings Maintenance Manual; and 3) To furnish and provide the supervision, personnel, equipment, insurances and other requisite necessary for the proper execution, performance and completion of the Maintenance Works so that no act or omission of Everfine FMS in relation thereto shall constitute, cause or contribute to any breach by UniTapah of any of UniTapah’s obligations to the GOM and UiTM under the Concession Agreement. (The rest of this page has been left blank intentionally) 32 | P AGE
47. SECTION 7 .0 INVESTMENT CONSIDERATIONS AND RISK FACTORS Investment in the Sukuk Murabahah involves certain risks. Each of the Sukuk Murabahah carries different risks and all potential investors are strongly encouraged to evaluate each issue of the Sukuk Murabahah on its own merit. This section provides a summary of certain risk factors, each of which, among others, may materially and adversely affect the ability of the Issuer to make payment under any Sukuk Murabahah in full at or before the maturity date for such Sukuk Murabahah. This section is not intended to be exhaustive. Prospective purchasers of the Sukuk Murabahah should read and carefully consider, among other things, the following factors in connection with the purchase of the Sukuk Murabahah and undertake their own investigations and analysis on the Issuer, its business and risks associated with the Sukuk Murabahah. 7.1 Risk Relating to the Issuer 7.1.1 Single Counterparty Risk UniTapah’s revenue in the form of receipt of Availability Charges which is the primary source of repayment for the Sukuk Murabahah is highly dependent on the strength of UiTM, ultimately the GOM. However, comfort is drawn from the fact that the GOM will honour the aforesaid payments as the same (via the Ministry of Education) is a direct signatory party to the Concession Agreement. 7.1.2 Termination of the Concession Agreement and Non-Performance of Maintenance Works The Concession Agreement provides the right to terminate the Concession Agreement to UiTM in several events of default. Upon such termination, the Issuer shall not be entitled to the payment of Availability Charges which is the main source of repayment of the Sukuk Murabahah. Notwithstanding the above, in the event of early termination of the Concession Agreement due to a default by UiTM during the Maintenance Period and upon the execution of the Supplemental Concession Agreement, UiTM shall pay the Issuer the amounts in accordance with the Table as set out on page 32 of this Information Memorandum. Whilst there is a possibility of non-performance of the Maintenance Works by the Issuer resulting in a default under the Concession Agreement, such possibility remains low given the non-complexity of such maintenance services. Further, the terms of the Sukuk Murabahah has built in a MA2 Minimum Required Balance of Ringgit Malaysia Five Million (RM5,000,000.00) which is intended to cater for any shortfall in relation to the maintenance services to be provided under the Concession Agreement, in the event that there are insufficient funds in the Maintenance Account 1. (The rest of this page has been left blank intentionally) 33 | P AGE
48. 7 .1.3 Right of Set-off The Concession Agreement provides that UiTM shall be entitled to set-off by deducting any money owing from the Concession Company to UiTM under the Concession Agreement from any sum which may become due or is payable to the Concession Company including but not limited to the Equity Portion and the Maintenance Charges, PROVIDED THAT this provision shall not affect any other remedy to which UiTM may be entitled for the recovery of such sums. Such set-off may happen during the period of the Maintenance Works whereby if any monies owing from the Concession Company to UiTM due to any Maintenance Works performed by UiTM or its agents/contractors (other than the Concession Company), UiTM has the right to set-off against the Availability Charges and Maintenance Charges. However, the possibility of the set-off remains low given the non-complexity of such maintenance services. In additional, if such set-off happens, the Maintenance Reserve Fund which can be used for such Maintenance Works purposes. The fund in the Maintenance Account 2 can also be utilised to pay the monies owning from the Concession Company to UiTM. 7.2 Risk Relating to the Sukuk Murabahah 7.2.1 Rating of the Sukuk Murabahah The Sukuk Murabahah has been assigned a rating of AA2 by RAM Ratings. A rating is not a recommendation to purchase, hold or sell the Sukuk Murabahah as such ratings do not comment as to market price or suitability for a particular investor. There is no assurance that a rating will remain in effect for any given period of time or that a rating will not be lowered, suspended or withdrawn entirely by an assigning rating organisation in the future, if, in its judgment, circumstances in the future so warrant. Further, such a rating is not a guarantee of payment or that there will be no default by the Issuer under the Sukuk Murabahah. In the event that the rating initially assigned to the Sukuk Murabahah is subsequently reduced, suspended or withdrawn for any reason, no person or entity will be obliged to provide any additional credit enhancement with respect to the Sukuk Murabahah. Any reduction, suspension or withdrawal of a rating may have an adverse effect on the liquidity and market price of the Sukuk Murabahah. 7.2.2 No prior market for the Sukuk Murabahah The Sukuk Murabahah comprises a new issue of securities for which there is currently no public market. No secondary market for the Sukuk Murabahah currently exists and in the event that a secondary market for the Sukuk Murabahah exists and in the event that a secondary market in the Sukuk Murabahah does develop, there can be no assurance that it will continue. Furthermore, there can be no assurance as to the liquidity of any market that may develop for the Sukuk Murabahah, the ability of Sukukholders to sell the Sukuk Murabahah or the prices at which Sukukholders would be able to sell their Sukuk Murabahah. 7.2.3 Market value of the Sukuk Murabahah may be subjected to fluctuations Trading prices of the Sukuk Murabahah may be influenced by numerous factors, including the operating results and/or financial condition of the Issuer, political, economic, financial and any other factors that can affect the capital 34 | P AGE
49. markets , the industry and/or the Issuer. Adverse economic developments could have a material adverse effect on the market value of the Sukuk Murabahah. 7.2.4 Interest rate risk The Sukuk Murabahah are fixed income securities although they do not pay interest. The market value of the Sukuk Murabahah may fluctuate due to movements in interest rates. Generally, a rise in interest rates may cause a fall in the prices of the Sukuk Murabahah and vice versa. The Sukuk Murabahah may be similarly affected resulting in a capital loss for the Sukukholders or investors when interest rates increase. Conversely, Sukukholders or investors stand to enjoy a capital gain when interest rates fall. 7.2.5 The Issuer's ability to meet its obligations under the Sukuk Murabahah The ability of the Issuer to meet its obligations to the Sukukholders in terms of payment of amounts due under the Sukuk Murabahah will depend on the strength of the Issuer’s net cash flow. Repayment of the Sukuk Murabahah will be the Issuer’s obligation alone. In particular, the Sukuk Murabahah will not be obligations or responsibilities of, or guaranteed by, any of the Issuer’s subsidiaries or associated companies, the Principal Adviser/ Lead Arranger/ Lead Manager, the Facility Agent, the Security Trustee or any subsidiary or affiliate thereof, and any other person involved or interested in the transactions envisaged under the Sukuk Murabahah. None of such persons will accept any liability whatsoever to the Sukukholders in respect of any failure by the Issuer to pay any amount due under the Sukuk Murabahah. 7.2.6 Suitability of investments The Sukuk Murabahah may not be a suitable investment for all investors. Each potential investor in the Sukuk Murabahah must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should: (a) have sufficient knowledge and experience to make a meaningful evaluation of the Sukuk Murabahah, the merits and risks of investing in the Sukuk Murabahah and the information contained in this Information Memorandum; (b) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Sukuk Murabahah and the impact the Sukuk Murabahah will have on its overall investment portfolio; (c) have sufficient financial resources and liquidity to bear all of the risks of an investment in the Sukuk Murabahah, including where the currency of payment is different from the potential investor's currency; (d) understand thoroughly the terms of the Sukuk Murabahah and be familiar with the behaviour of any relevant indices and financial markets; and (e) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic and other factors that may affect its investment and its ability to bear the applicable risks. 35 | P AGE
50. 7 .2.7 Each Tranche Carries Different Risks The purchase of the Sukuk Murabahah may involve substantial risks and is suitable only for sophisticated investors who have the knowledge and experience in financial and business matters necessary to enable them to evaluate the risks and the mitigating factors of an investment in the Sukuk Murabahah. Each tranche of Sukuk Murabahah will carry different risks and all potential investors are strongly encouraged to evaluate the Sukuk Murabahah on its own merit before making an investment decision. 7.2.8 No Assignment of the Concession Agreement The Sukuk Murabahah will be secured by the securities as set out in paragraph 2.2 in this Information Memorandum. Such securities however will not include an assignment over the Concession Agreement and as a result, the Sukukholders will not have direct recourse against the Government and UiTM as they would have had by virtue of being an assignee of the Concession Agreement. Instead, all the rights of the Issuer under the Concession Agreement will remain with the Issuer. However, given that the Sukukholders will have a debenture over the Issuer’s assets, and therefore have the right to appoint a receiver over the Issuer, the Sukukholders will still effectively be able to take the benefit of the rights of the Issuer against the Government and UiTM by virtue of the charges and rights under the debenture. This essentially entails the Sukukholders having to appoint a receiver who would then be acting as the agent of the Issuer and would be in a position to enforce the rights of the Issuer against UiTM and the Government, if necessary, for the benefit of the Sukukholders. 7.2.9 Amendments to Concession Agreement The terms of the Concession Agreement and the Supplemental Concession Agreement (when executed) may from time to time be amended, varied, replaced and supplemented by the Parties thereto. It is however a negative covenant by the Issuer in the transaction documents in respect of the Sukuk Murabahah to not terminate, revoke, suspend, modify or waive any conditions of the Concession Agreement and the Supplemental Concession Agreement without the prior written consent of the Sukukholders. Notwithstanding such negative covenant on the part of the Issuer, the Government, being a party to the Concession Agreement and the Supplemental Concession Agreement (when executed) will be from time to time allowed to amend, vary, replace and supplement such terms. 7.3 Forward Looking Statements Certain statements in this Information Memorandum are forward-looking in nature. These statements include, among other things, discussions of the Issuer’s business strategy and expectation concerning its position in the Malaysian economy and future operations. All forward-looking statements are based on estimates and assumptions made by the Issuer and third party consultants (if any), that, although believed to be reasonable, are subject to risks and uncertainties that may cause actual events and the future results of the Issuer to be materially different from that expected or indicated by such statements and estimates and no assurance can be given that any of such statements or estimates will be realised. In light of these and other uncertainties, the inclusion of forward-looking statements in this Information Memorandum should not be regarded as a representation or warranty by the Issuer or any other person that the plans and objectives of the Issuer will be achieved. 36 | P AGE
51. SECTION 8 .0 INDUSTRY OVERVIEW Information in this section includes statistical data and economic information obtained from various sources believed to be reliable but which have not been independently verified by the Issuer, the Principal Adviser/Lead Arranger/Lead Manager or any other party involved in preparing this Information Memorandum. The Issuer, the Principal Adviser/Lead Arranger/Lead Manager and such other party/parties make no guarantee, representation or warranty and accept no responsibility or liability as to such information’s accuracy or completeness or currency. Prior to making an investment decision, prospective investors should make their own judgment on the accuracy and completeness of such information and that it is current. No consent has been sought from any of the organisations in respect of the reproduction of an excerpts or extracts of data or information from the sources referred to herein. 8.1 Overview of the Malaysian Economy The Malaysian economy registered a strong growth of 6.4% in the second quarter of 2014 (1Q 2014: 6.2%), underpinned by higher exports and continued strength in private domestic demand. On the supply side, growth in the major economic sectors remained firm, supported by trade and domestic activity. On a quarter-on-quarter seasonally adjusted basis, the economy grew by 1.8% (1Q 2014: 0.8%). Public consumption declined marginally by 1.3% (1Q 2014: 11.2%), reflecting lower Government spending on emoluments, and supplies and services. Public investment declined by 3.3% (1Q 2014: -6.4%), due to lower spending on fixed assets by both the Federal Government and public enterprises. On the supply side, growth in the major economic sectors remained strong. The services sector recorded sustained growth, supported mainly by the trade-related subsectors. The manufacturing sector expanded at a faster pace, underpinned by the electronics and electrical cluster, particularly semiconductors. The construction sector expanded at a more moderate pace, driven mainly by the residential and nonresidential sub-sectors. Meanwhile, the agriculture sector registered strong growth, reflecting higher production of palm oil. The mining sector turned around to record positive growth, due mainly to higher production of both natural gas and crude oil. The inflation rate, as measured by the annual change in the Consumer Price Index (CPI), averaged 3.3% in the second quarter of 2014 (1Q 2014: 3.4%). The slight decline was due to lower inflation in the food and non-alcoholic beverages and housing, water, electricity, gas and other fuels categories. The trade surplus amounted to RM18.4 billion in the second quarter of 2014 (1Q 2014: RM26.3 billion). Gross exports grew at a stronger pace of 14.2% (1Q 2014: 10.8%), reflecting the continued expansion of global economic activity. Gross imports also increased, registering growth of 8.6% (1Q 2014: 5.5%). The international reserves of Bank Negara Malaysia (BNM) amounted to RM423.6 billion (equivalent to USD131.9 billion) as at 30 June 2014. This reserve level has taken into account the quarterly adjustment for foreign exchange revaluation changes. As at 31 July 2014, the reserves position amounted to RM423.5 billion (equivalent to USD131.8 billion), sufficient to finance 9.1 months of retained imports and is 1.2 times the redefined short-term external debt. (Source: Quarterly Bulletin: Economic and Financial Developments in Malaysia in the Second Quarter of 2014 – First Quarter 2014, Bank Negara Malaysia) 37 | P AGE
52. 8 .2 Overview of the Construction Market The construction activities are expected to moderate this year, a result of the softer residential property market amid more prudent bank lending and weaker demand following the unsustainable price escalation in the last few years. Loans extended to the construction sector and the overall outstanding facilities for this industry exhibit a decelerating trend in 2013, underscored by more prudent lending. However, healthy construction-related output still shows stable growth (after the General Election) and indicate resilient construction activities going forward. Although the property sector may be cooling in tandem with the current supply/demand dynamics, the construction sector is expected to maintain a healthy growth of 8.4% this year, i.e. moderately lower than the 10.9% of 2013. The continued rollout of ETP projects and other large-scale investments are also envisaged to support growth. (Source: Economic Outlook 2014; RAM Holdings) 8.3 Economic Outlook for 2013/2014 The Malaysian economy is expected to expand further by 5%-5.5% (2013: 4.5% - 5%), supported by favourable domestic demand and an improving external environment. Growth will be private-led, supported by strong private capital spending while private consumption continues to remain resilient. Although some degree of uncertainty exists in the global environment due to the volatility of capital flows associated with the possibility of reduced global liquidity, Malaysia’s external sector is expected to improve. This is in tandem with the continued recovery of growth across advanced economies as well as stronger regional trade activities which is evident in the second half of 2013. The better outlook of Malaysia’s external sector is premised upon China’s real GDP growth, which is expected to be sustained at around 7.5%, while global trade will continue to grow at a steady pace of 5% in 2014. Domestic demand is expected to continue its strong growth momentum, driven mainly by the private sector. Strong domestic fundamentals, including low unemployment, rising household income and sustained consumer confidence, will support the continued expansion of private consumption. Growth in private investment is expected to remain strong in line with improving external demand and increasing domestic activity. Public expenditure will be largely underpinned by increased spending on supplies and services. Malaysia’s macroeconomic fundamentals are expected to remain strong. Of significance, labour market conditions are expected to be favourable with the unemployment rate at 3.1%. The labour market is expected to be supported by increased employment, particularly in the services-related industries and exportoriented manufacturing industries in tandem with strong domestic consumption and improving external demand. Headline inflation is expected to remain manageable at 2% - 3% in 2014. The increase in the CPI largely reflects fuel price adjustment in September 2013. Global food prices, as reported by FAO, are expected to remain stable as food commodity markets are projected to be more balanced in 2013 and 2014. Domestic demand-driven inflation is expected to remain modest, amid increased capacity expansion and improved productivity. Producer cost pressure is expected to remain muted given the stable energy and commodity prices. Hence, the nominal GNI per capita is expected to increase to 6.2% to RM34,126 (2013 : 4.2%; RM32,144). In terms of Purchasing Power Parity (PPP), per capita income is expected to increase 2.6% to reach USD17,173 (2013 : 1.3%; USD16,743). (Source: Economic Report 2013/2014, Ministry of Finance Malaysia) (The rest of this page has been left blank intentionally) 38 | P AGE
53. SECTION 9 .0 9.1 OTHER INFORMATION Material Litigation As at 15 October 2014, UniTapah is not engaged in any litigation or arbitration, either as plaintiff or defendant which has a material effect on the financial position of UniTapah and the directors do not know of any proceedings pending or threatened or of any fact likely to give rise to any proceedings which might materially and adversely affect the position or business of UniTapah. As at 15 October 2014, UniTapah or its directors have not been convicted or charged with any offence under the securities laws, corporation laws or other laws involving fraud or dishonesty in a court of law, for the last five (5) years prior to the date of this Information Memorandum. 9.2 Material Contracts Outside the Ordinary Course of Business As at 15 October 2014, save for those as disclosed in this Information Memorandum, there are no contracts which are or may be material, not being contracts entered into in the ordinary course of business, which have been entered into by UniTapah. 9.3 Related Party Transactions As at 15 October 2014, the directors of UniTapah are not aware of any related party transactions, save for an advance or amount due to UniTapah’s related company, in the outstanding amount of RM15,224,829.04. 9.4 Material Contingent Liabilities and Material Capital Commitments As at 15 October 2014, the directors of UniTapah are not aware of any material contingent liabilities and material capital commitments, which upon becoming enforceable, may have a material adverse effect on the financial position and/or the business of UniTapah. 9.5 Conflict of Interest Kenanga Investment Bank Berhad After making enquiries as were reasonable in the circumstances, KIBB is not aware of any circumstance that would give rise to a conflict of interest in its capacity as, amongst others, the Principal Adviser, Lead Arranger, Lead Manager and Facility Agent in relation to the Sukuk Murabahah. Messrs. Adnan Sundra & Low After making enquiries as were reasonable in the circumstances, Messrs. Adnan Sundra & Low is not aware of any circumstance that would give rise to a conflict of interest in its capacity as the solicitors for the Principal Adviser/Lead Arranger/Lead Manager in relation to the Sukuk Murabahah. Pacific Trustees Berhad After making enquiries as were reasonable in the circumstances, Pacific Trustees Berhad is not aware of any circumstance that would give rise to a conflict of interest in its capacity as the Trustee and Security Trustee in relation to the Sukuk Murabahah. 39 | P AGE
54. Messrs . Baker Tilly Monteiro Heng After making enquiries as were reasonable in the circumstances, Messrs. Baker Tilly Monteiro Heng is not aware of any circumstance that would give rise to a conflict of interest in its capacity as the Reporting Accountant in relation to the Sukuk Murabahah. Dr. Mohd Daud Bakar After making enquiries as were reasonable in the circumstances, Dr. Mohd Daud Bakar is not aware of any circumstance that would give rise to a conflict of interest in his capacity as the Shariah Adviser in relation to the Sukuk Murabahah. (The rest of this page has been left blank intentionally) 40 | P AGE
55. APPENDIX I Principal Terms and Conditions of the Sukuk Murabahah
56. Words and expressions used and defined in this appendix , in the event of an inconsistency with the definitions section of this Information Memorandum, only be applicable for this appendix. 1.01 Background Information (a) Issuer (i) Name : UniTapah Sdn Bhd (“UniTapah” or the “Issuer”). (ii) Address : Registered Address: 14-2, Jalan 4A/27A Section 2, Wangsa Maju 53300 Kuala Lumpur Business Address: Penthouse, The Crest, 3 Two Square 2, Jalan 19/1 46300 Petaling Jaya Selangor Darul Ehsan (iii) Business number registration : 846665-X. (iv) Date and incorporation place of : 13 February 2009 / Malaysia. (v) Date of listing, applicable where : Not applicable. (vi) Status on residence, i.e. whether it is a resident controlled company or non-resident controlled company : Resident-controlled company. (vii) Principal activities : UniTapah is a single purpose vehicle incorporated to undertake the planning, design, development, construction, landscaping, equipping, installation, completion, testing, commissioning and the maintenance of the facilities and infrastructure on part of a piece of land held by Universiti Teknologi Mara (“UiTM”) under HS(D) 15461, PT 4740, Mukim Batang Padang, Daerah Batang Padang, Negeri Perak in accordance with the terms of the concession agreement entered into between the Government of Malaysia (“the Government”), UiTM and UniTapah on 4 May 2010 (“Concession Agreement”). (viii) Board of directors : The board of directors of UniTapah as at 31 March 2014 are as follows: 1) 2) Sri Rahayu Bt Tajuddin Abdul Rahman Vignesh Naidu A/L Kuppusamy Naidu I
57. 3 ) Tengku Dato’ Sulaiman Shah Bin Tengku Abdul Jalil Shah Yong Soon Chow Yong Shang Ming 4) 5) (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders : The shareholder and structure of shareholding of the Issuer as at 31 March 2014 are as follows: Name shareholder of *Crest Builder International Sdn Bhd (Company No. 644441-T) Detik Utuh Sdn Bhd (Company No.722565-A) No. of ordinary shares held 510,000 % 51% 490,000 49% *Crest Builder International Sdn Bhd also owns 4,000,000 redeemable preference shares of RM1.00 each in UniTapah. (x) Authorised, issued paid-up capital and : The authorised, issued and paid-up capital of the Issuer as at 31 March 2014 are as follows: Authorised: Ordinary shares of RM1.00 each 1,000,000 Redeemable preference share of RM1.00 each 4,000,000 Total 5,000,000 Issued and fully paid-up: (xi) Disclosure of the following  If the Issuer or its board members have been convicted or charged with any offence under the securities laws, corporation laws or Ordinary shares of RM1.00 each 1,000,000 Redeemable preference share of RM1.00 each 4,000,000 Total 5,000,000 : None. II
58. other laws involving fraud or dishonesty in a court of law , for the past five years prior to the date of application; and  If the Issuer has been subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the date of application. None. (The rest of this page has been intentionally left blank) III
59. 1 .02 (a) Principal Terms and Conditions Names of parties involved in the proposed transaction (where applicable) (i) Principal adviser : Kenanga Investment No.15678-H) (“KIBB”). (ii) Lead arranger : KIBB (“Lead Arranger”). (iii) Co-arranger : Not applicable. (iv) Solicitor : Messrs Adnan Sundra & Low (“Solicitors”). (v) Financial adviser : Not applicable. (vi) Technical adviser : Not applicable. (vii) Sukuk trustee : Pacific Trustees Berhad (Company No. 317001-A) (“Trustee”). (viii) Shariah adviser : Dr. Mohd Daud Bakar. (ix) Guarantor : Not applicable. (x) Valuer : Not applicable. (xi) Facility agent : KIBB (“Facility Agent”). (xii) Primary subscriber (under a bought-deal arrangement) and amount subscribed : To be determined prior to issuance (in respect of issuance via bought deal basis only). (xiii) Underwriter and amount underwritten : Not applicable. The Sukuk Murabahah will not be underwritten. (xiv) Central depository : Bank Negara Malaysia (“BNM”). (xv) Paying agent : BNM. (xvi) Reporting accountant : Baker Tilly Monteiro Heng. (xvii) Calculation agent : Not applicable. : Security Trustee Pacific Trustees Berhad. (xviii) Others specify) (please Bank Berhad (Company Lead Manager KIBB. (b) Islamic used principles : The issuance of the Sukuk Murabahah (as defined in item 1.02 (c) below) will be based on the Shariah principles of Murabahah via a Tawarruq arrangement, which are the Shariah principles and concepts approved by the Shariah Advisory Council (“SAC”) of the Securities Commission Malaysia (“SC”). IV
60. (c) Facility description : Issuance of up to RM600.0 million in nominal value of Islamic securities based on the Shariah principles of Murabahah via a Tawarruq arrangement (“Sukuk Murabahah”). The Sukuk Murabahah shall be a onetime issuance. Underlying Transaction In respect of the issuance of Sukuk Murabahah, the investor(s) (“Sukukholders”) shall appoint the Facility Agent as the buying and selling agent (“Wakeel”) of Shariah-compliant commodities (“Commodities”). UniTapah shall issue a purchase order (“Purchase Order”) to the Sukukholders through the Wakeel for the purchase of the Commodities. The Purchase Order constitutes a unilateral binding promise (Wa’d Mulzim) by UniTapah to purchase the said Commodities at a sale price to be paid on a deferred payment basis (“Deferred Sale Price”). The Deferred Sale Price represents the Purchase Price (as defined herein) and profit portion to be agreed between UniTapah and the Wakeel. Pursuant to the issuance of Purchase Order by UniTapah, the Sukukholders shall pay the purchase price (“Purchase Price”) of the Commodities to the Wakeel which is equivalent to the amount disbursed under the Sukuk Murabahah. The Issuer shall issue, and the Sukukholders shall subscribe, to the Sukuk Murabahah issued by the Issuer to evidence Sukukholders’ ownership in the Commodities and subsequently, represent the Sukukholders’ entitlement to receive the Deferred Sale Price once the Commodities are sold to UniTapah. Upon receipt of the Purchase Price, the Wakeel, on behalf of the Sukukholders shall then purchase the Commodities from commodity vendor(s) in the Bursa Suq Al-Sila’ commodity market through a Commodity Trading Participant (“CTP”), who will facilitate the buying and selling of the commodities on a spot basis. Bursa Suq Al-Sila’ is a commodity trading platform with multiple commodity vendors. Upon completion of the purchase, the Wakeel, on behalf of the Sukukholders, shall sell the Commodities to UniTapah at the Deferred Sale Price. UniTapah shall pay the Deferred Sale Price via the Wakeel to the Sukukholders. Subsequently, UniTapah shall sell the Commodities via the same CTP to Bursa Malaysia Islamic Services Sdn Bhd on a spot basis at an amount equivalent to the Purchase Price. V
61. Please refer to Appendix 1 for a diagrammatic illustration of the underlying transaction above . (d) Identified assets : Shariah-compliant commodities (which shall, inter alia, exclude ribawi items in the category of medium of exchange such as currency, gold and silver) which are provided through the commodity trading platform, Bursa Suq Al-Sila’. (e) Purchase and selling price/ rental (where applicable) : Purchase Price The Purchase Price in relation to the purchase of the commodities shall be equal to the proceeds of the Sukuk Murabahah. The value of the commodities shall be in compliance with the asset pricing requirements set out in the Guidelines on Sukuk effective on 8 January 2014 (as may be amended from time to time) (“Sukuk Guidelines”). Deferred Sale Price The Deferred Sale Price shall comprise the Purchase Price plus the aggregate profit portion and will be determined prior to the sale of the commodities to the Issuer and to be evidenced by the issue of the Sukuk Murabahah. (f) Issue /sukuk programme size : Up to RM600.0 million in nominal value. (g) Tenure of issue sukuk programme : The Sukuk Murabahah shall be a one-time issuance and in tranches with tenure of up to twenty one (21) years. / The one-time issuance of the Sukuk Murabahah shall be made within one (1) year from the date of the approval by the SC or such other later date as may be approved by the SC. (h) Availability period of sukuk programme : Not applicable. (i) Profit / coupon rental rate / : The profit rate will be determined and agreed prior to the issuance of the Sukuk Murabahah. (j) Profit / coupon / rental payment frequency : The profits are payable in arrears semi-annually, or such other period to be agreed between the Issuer and the Lead Arranger prior to the issuance of the Sukuk Murabahah. (k) Profit / coupon / rental payment basis : Actual/365 days. VI
62. (l) Security / collateral, where applicable : (iv) Debenture evidencing a fixed and floating charge over UniTapah’s present and future assets; (v) First ranking charge and assignment of the Designated Accounts and the credit balances therein (as defined in item 1.02(n) below); and (vi) First ranking assignment of takaful policies, if any, in relation to the Concession Agreement with the Security Trustee designated as loss payee/mortgagee, to the extent permitted by prevailing laws. The security above shall be created on a first ranking basis in favour of the Security Trustee. For the avoidance of doubt, prior to the discharge of the existing securities in favour of Bank Pembangunan Malaysia Berhad (“BPMB”) under the Bai’ Istisna (“BIS”) facilities, the securities under paragraphs (i) and (iii) above shall rank after the securities created under the BPMB’s BIS facilities. (m) Details on utilisation of proceeds by issuer/obligor and originator (in the case of ABS). If proceeds are to be utilised for project or capital expenditure, description of the project or capital expenditure, where applicable : The Issuer shall utilise the proceeds for the following Shariah-compliant purposes: Purpose *Estimated Amount (RM) 300,000,000 (i) To refinance the amount outstanding under the existing BIS facilities granted by BPMB. (ii) To repay the advances and other related costs due to its related company, Crest Builder Sdn Bhd which is in relation with the construction works under the Concession Agreement. 45,000,000 (iii) To set aside in the FSRA (as defined in item 1.02(n) below) for the purpose of meeting the FSRA Minimum Required Balance (as defined in item 1.02(n) below). 15,000,000 (iv) To set aside in the Revenue Account (as define in item 1.02(n) below). Up to 30,000,000 VII
63. (v) To set aside in the Maintenance Account 2 (as defined in item 1.02(n) below) for the purpose of meeting the MA 2 Minimum Required Balance (as defined in item 1.02(n) below). 5,000,000 (vi) To fund the Trustees’ Reimbursement Account (as defined in item 1.02(y)(i) below). 30,000 (vii) The balance, if any, shall be utilised for UniTapah’s Shariah-compliant general corporate purposes which are to defray expenses incurred in relation to the Sukuk Murabahah and to make advances to its shareholders and/or ultimate holding company (“Internal Transfer”)#. the balance Total Up to 600,000,000 Note: *These figures are merely an estimation and the exact figures may be different from the above estimates. # The Internal Transfer will be one-off and the amount will not be more than RM180.0 million from the proceeds of the Sukuk Murabahah. (n) Sinking fund and designated accounts, where applicable : The Issuer is required to open and maintain five (5) Shariah-compliant designated accounts with a financial institution (with a minimum rating of A2/P1 or its equivalent) acceptable to the Lead Arranger: (i) (ii) (iii) (iv) (v) Disbursement Account; Revenue Account; Financial Service Reserve Account (“FSRA”); Maintenance Account 1; and Maintenance Account 2; (collectively, the “Designated Accounts”. The Disbursement Account, Revenue Account, FSRA and Maintenance Account 2 shall hereinafter be referred to as the “Security Trustee Designated Accounts”). Disbursement Account The Issuer shall open and maintain a Shariahcompliant bank account designated as “Disbursement Account” in which all proceeds raised from the VIII
64. issuance of Sukuk Murabahah are to be deposited therein . The funds in the Disbursement Account shall be utilised in accordance with item 1.02(m) above. The Disbursement Account shall be operated solely by the Security Trustee. All withdrawals from the Disbursement Account shall be accompanied by relevant supporting documents in form and substance satisfactory to the Security Trustee. The Disbursement Account shall be closed when the funds in the account are fully utilised. Revenue Account UniTapah shall open and maintain a Shariahcompliant bank account designated as the “Revenue Account” in which the proceeds of the Junior Sukuk (as defined in item 1.02(t)(xix) below) and all the payments received from UiTM pursuant to the Concession Agreement (“Concession Payments”) (including Availability Charges (as defined in item 1.02(y)(xvii) below) but excluding Maintenance Charges (as defined in item 1.02(y)(xv) below) and the Maintenance Reserve Fund (as defined in item 1.02(y)(xvi) below)) and all other income, revenue, takaful proceeds and other proceeds received by UniTapah (including any shareholders’ advances for shortfall for the Availability Charges but excluding any shareholders’ advances for shortfall for providing maintenance services and any compensation received from UiTM under the Concession Agreement) are to be deposited. The Revenue Account will also capture the amount set-aside from the Disbursement Account. Upon the refinancing of the BPMB’s BIS facilities, all monies remaining in the designated accounts in respect of the BPMB’s BIS facilities will be transferred and deposited into the Revenue Account and such designated accounts shall be closed when the funds in the accounts are fully transferred to the Revenue Account. Funds in the Revenue Account shall be utilised based on the following order of priority: g) h) i) j) k) Tax and other statutory obligations; Administrative expenses of UniTapah including payment of annual recurring fees to the relevant agents/advisers under the Sukuk Murabahah and payment of fees to its auditors and tax agents, up to a maximum of RM1,200,000 in any financial year*; Any transfer to the FSRA in order to maintain the FSRA Minimum Required Balance; Profit payments under the Sukuk Murabahah falling due and payable; Principal payments under the Sukuk Murabahah falling due and payable; and IX
65. l ) Purchase of the Sukuk Murabahah (if UniTapah so elects) under item 1.02(x) below. *Note: If the administrative expenses of UniTapah exceeds the maximum of RM1,200,000, the Issuer will procure from its shareholder/(s) to fund the excess. The Revenue Account shall be operated solely by the Security Trustee. All withdrawals from the Revenue Account shall be accompanied by relevant supporting documents (in form and substance satisfactory to the Security Trustee). Finance Service Reserve Account The Issuer shall open and maintain a Shariahcompliant bank account designated as the “FSRA”. The Issuer shall ensure that the FSRA contains an amount equivalent to an amount payable in respect of any profit and principal payment of the Sukuk Murabahah for the next six (6) months. The FSRA shall be solely operated by the Security Trustee. The Issuer shall at all times thereafter maintain an amount equivalent to an amount payable in respect of any profit and principal payment of the Sukuk Murabahah for the next six (6) months, until the Sukuk Murabahah are fully repaid (“FSRA Minimum Required Balance”). Notwithstanding the FSRA Minimum Required Balance, the Issuer can utilise the FSRA for profit and principal payments after fully utilising balance in Revenue Account. In the event that the balance held in the FSRA is less than the FSRA Minimum Required Balance, the shortfall shall be topped up from the Revenue Account. The Issuer shall top up the FSRA so as to comply with the FSRA Minimum Required Balance within thirty (30) days from the date of the balance held in FSRA is less than the FSRA Minimum Required Balance. In the event that the balance held in the FSRA exceeds the FSRA Minimum Required Balance, the excess shall be released to the Revenue Account or any such other Security Trustee Designated Accounts mutually agreed between the Issuer and the Security Trustee. For the avoidance of doubt, any non-compliance in relation to meeting the FSRA Minimum Required Balance shall constitute an Event of Default (as defined in item 1.02(v) below) if such non-compliance is not remedied within thirty (30) days from the date of any shortfall in the FSRA to meet the FSRA Minimum X
66. Required Balance . Maintenance Account 1 UniTapah shall open and maintain a Shariahcompliant bank account designated as the “Maintenance Account 1” in which Maintenance Charges from UiTM pursuant to the Concession Agreement and the shareholders’ advances (as the case may be) for providing maintenance services are to be deposited. The Maintenance Account 1 shall be solely maintained and operated by the Issuer who shall be the sole signatory of the account prior to an Event of Default. Upon written notification is being made to the Security Trustee on the occurrence and the subsistence of an Event of Default, the Security Trustee shall be the sole signatory to operate the Maintenance Account 1. Maintenance Account 2 UniTapah shall open and maintain a Shariahcompliant bank account designated as the “Maintenance Account 2”. The Issuer shall ensure that the Maintenance Account 2 contains an amount equivalent to RM5,000,000.00. The Issuer shall at all times thereafter maintain an amount equivalent to RM5,000,000.00 until the Sukuk Murabahah are fully repaid (“MA 2 Minimum Required Balance”). Notwithstanding the MA 2 Minimum Required Balance, the Issuer can utilise the monies in the Maintenance Account 2 to pay for any shortfall in relation to the maintenance services to be provided under the Concession Agreement in the event that there are insufficient funds in the Maintenance Account 1. In the event that the balance held in the Maintenance Account 2 is less than the MA 2 Minimum Required Balance, the shortfall shall be topped up from the Maintenance Account 1 and/or shareholders’ advances within thirty (30) days from the date when the balance held in Maintenance Account 2 is less than the MA 2 Minimum Required Balance, failing which, an Event of Default would have occurred at the expiry of the thirty (30) days period. The Maintenance Account 2 shall be operated solely by the Security Trustee. All withdrawals from the Maintenance Account 2 shall be accompanied by relevant supporting documents (in form and substance satisfactory to the Security Trustee). Monies in any of the Designated Accounts may be XI
67. invested in Permitted Investments (as defined in item 1.02(y)(vii) below). Funds invested in Permitted Investments and income received from such Permitted Investments shall be remitted into the Revenue Account or any such other Security Trustee Designated Accounts mutually agreed between the Issuer and the Security Trustee in a timely manner to meet any payment obligations of the Issuer when due and payable. Immediately after the last maturity date of the Sukuk Murabahah and all payment obligations under the Sukuk Murabahah have been fully settled, the Designated Accounts shall be closed and any credit balance shall be transferred to the Issuer. (o) (p) Rating  Credit rating assigned and whether the rating is final or indicative. In the case of a sukuk programme where the credit rating is not assigned for the full amount, disclosures set out in paragraph 9.04 of these Guidelines must be made; and : The Sukuk Murabahah preliminary rating of AA2.  Name of credit rating agencies : RAM Rating Services Berhad (“RAM Ratings”). Mode of issue : The Sukuk Murabahah may be issued via direct/private placement, bought deal basis or book running on a best effort basis all without prospectus. has been accorded a The issuance of Sukuk Murabahah shall be in accordance with (i) the Participation and Operation Rules for Payments and Securities Services issued by Malaysian Electronic Clearing Corporation Sdn Bhd (“MyClear”)(“MyClear Rules”); and (ii) the Operational Procedures for Securities Services issued by MyClear (“MyClear Procedures”) or their replacement thereof (collectively referred to as “MyClear Rules and Procedures”) applicable from time to time. (q) Selling restrictions, including tradability, i.e. whether tradable or non-tradable : Selling Restrictions at Issuance The Sukuk Murabahah may only be offered, sold, transferred or otherwise disposed directly or indirectly to persons falling within the relevant category of the XII
68. persons specified in Section 4 (6) of the Companies Act, 1965, as amended from time to time, and persons to whom an offer or invitation to subscribe the Sukuk Murabahah may be made and to whom the Sukuk Murabahah are issued would fall within Schedule 6 or Section 229(1)(b) and Schedule 7 or Section 230(1)(b) read together with Schedule 9 or Section 257(3) of the Capital Markets and Services Act, 2007 (“CMSA”). Selling Restrictions Thereafter The Sukuk Murabahah may only be offered, sold, transferred or otherwise disposed directly or indirectly to persons falling within the relevant category of the persons specified in Section 4(6) of the Companies Act, 1965, as amended from time to time and persons to whom an offer or invitation to purchase the Sukuk Murabahah would fall within Schedule 6 or Section 229(1)(b) read together with Schedule 9 or Section 257(3) of the CMSA. The Sukuk Murabahah are tradable and transferable subject to the Selling Restrictions above. (r) Listing status and types of listing, where applicable : The Sukuk Murabahah shall not be listed on Bursa Malaysia Securities Berhad or any other stock exchange. (s) Other regulatory approvals required in relation to the issue, offer or invitation to subscribe or purchase sukuk, and whether or not obtained : None. (t) Conditions precedent : The issuance of the Sukuk Murabahah shall be subject to the following conditions (each in form and substance acceptable to the Lead Arranger) which is including but not limited to: (i) the Transaction Documents (as defined in item 1.02(y)(vi) below) shall have been duly approved, authorised, executed, where applicable stamped or endorsed as exempted from stamp duty and presented for registration with the relevant authorities; (ii) All relevant notices and acknowledgements (where applicable) and approvals/consents as may be required by the Lead Arranger and as advised by the Solicitors shall have been made or received, as the case may be, including the requisite written consent of the Government approving, amongst others, the refinancing of the BIS facilities granted by XIII
69. BPMB on the issuance of the Sukuk Murabahah of which the proceeds will be used to repay the facility taken by the Issuer from BPMB ; (iii) Receipt from the Issuer of the following: a. Certified true copy of its Certificate of Incorporation and Memorandum and Articles of Association; b. Certified true copy of its Board of Directors’ resolution authorising, amongst others, (i) the undertaking and implementation of the Sukuk Murabahah, (ii) the execution of the Transaction Documents and (iii) the appointment of authorised signatory(ies) of the Issuer to accept, undertake and implement the issuance of the Sukuk Murabahah; c. Certified true copies of the Issuer's latest Form 24, Form 44 and Form 49 and any other statutory forms as may be required by the Lead Arranger and the Solicitors; and d. Specimen signatures of its authorised signatories; (iv) Evidence of authorisation from the SC in respect of the Sukuk Murabahah; (v) Receipt of redemption statement cum undertaking to refund the redemption amount and to discharge the existing security provided to BPMB addressed to the Sukuk Trustee; (vi) Evidence that a supplemental concession agreement between Government, UiTM and Issuer (“Supplemental Concession Agreement”) has been executed; (vii) Evidence that the Sukuk Murabahah have been accorded a minimum rating of AA3 by RAM Ratings; (viii) Documentary evidence that the Trustees’ Reimbursement Account and the Designated Accounts have been opened for the purpose stated in the Transaction Documents and the mandate for operating the Security Trustee Designated Accounts has been issued in favour of the Security Trustee as the sole signatory of those accounts and the mandate for operating the Trustees’ Reimbursement Account has been issued in favour of the XIV
70. Trustee as the sole signatory ; (ix) Evidence of payment or arrangement for payment of all relevant upfront transaction fees, costs and expenses relating to the Sukuk Murabahah; (x) The Lead Arranger shall have received a legal opinion from the Solicitors addressed to the Lead Arranger and the Trustee advising them with respect to the legality, validity and enforceability of the Transaction Documents; (xi) The Lead Arranger shall have received from the Solicitors, a confirmation addressed to the Lead Arranger that all conditions precedent have been fulfilled or waived, as the case may be; (xii) Receipt of the tax opinion from UniTapah’s tax consultant in the form and substance acceptable to the Lead Arranger; (xiii) Evidence of confirmation from the Shariah Adviser that the structure, mechanism and Transaction Documents of the Sukuk Murabahah are in compliance with Shariah; (xiv) Receipt of a joint letter of undertaking (in the form and substance acceptable to the Lead Arranger) executed by Crest Builder International Sdn Bhd and Detik Utuh Sdn Bhd (“Joint Letter of Undertaking”) whereby each of them undertakes to, amongst others, procure UniTapah to issue and deliver invoices in respect of the Concession Payments to UiTM in a timely manner and as prescribed under the Concession Agreement; (xv) Receipt of certified true copy of the acknowledgement from UiTM that payment of Concession Payments (including the Availability Charges and/or any amount payable to the Issuer as a result of the early termination of the Concession Agreement) by UiTM will be made directly into the Revenue Account, and the Maintenance Charges into the Maintenance Account 1; (xvi) A report of the relevant winding up search of the Issuer; (xvii) A report of the relevant company search of the Issuer; (xviii) Receipt of Certificate of Acceptance (as defined in item 1.02(y)(xiv) below) and other XV
71. relevant documents to confirm that the construction works under the Concession Agreement had been completed and the facilities and infrastructures had been accepted by UiTM ; (u) Representations and warranties : (xix) Documentary evidence satisfactory to the Lead Arranger that a subordinated sukuk in a sum not less than RM45,000,000.00 had been issued by the Issuer (“Junior Sukuk”) and has been subscribed by the shareholder of the Issuer with the issuance proceeds from the Junior Sukuk having been deposited into the Revenue Account; (xx) Confirmation that the Issuer has no other borrowings other than the Sukuk Murabahah and the Junior Sukuk; (xxi) Documentary evidence that a deed of subordination has been entered into between the Issuer and the shareholders of the Issuer in relation to the subordination of shareholders’ present and future advances and the Junior Sukuk; and (xxii) Such other conditions precedent as may be advised by the Solicitors and mutually agreed by the Issuer and the Lead Arranger. Customary representations and warranties for transactions of this nature including but not limited to the following: (i) The Issuer is duly incorporated under the laws of Malaysia and validly existing; (ii) The Issuer has the power and authority to conduct the business in which it is engaged, and has the power and authority to enter into, exercise its rights under and perform its obligations under the Transaction Documents; (iii) All necessary corporate actions have been taken to authorise, and all authorisations of any governmental or other authority have been duly and unconditionally obtained and are in full force and effect which are required to authorise the Issuer to own its assets, carry on its business as it is being conducted, and sign, deliver, and perform the transactions and obligations contemplated in the Transaction Documents; (iv) No authorisation, approval, consent, licence, exemption, registration, recording, filing or notarisation and no payment of any duty or XVI
72. tax and no other action whatsoever which has not been duly and unconditionally obtained , made or taken is necessary or desirable to ensure the legality, validity, enforceability of the Issuer’s liabilities and obligations or the rights of the Trustee under the Transaction Documents or the rights of the Sukukholders; (v) Neither the signing and delivery of the Transaction Documents nor the performance of any of the transactions contemplated in the Transaction Documents will: (a) contravene or constitute a default under any provision contained in any agreement, instrument, law, judgement, order, licence, permit or consent by which the Issuer or any of its assets are bound or affected; (b) cause any limitation on the Issuer or the powers of its directors, imposed by or contained in its Memorandum and Articles of Association, or in any agreement, instrument, law, ordinance, decree, order, rule, regulation, judgement or otherwise to be exceeded; or (c) cause the creation or imposition of any security interest or restriction of any nature on any of its assets (other than the security as contemplated under the Transaction Documents); (vi) The Issuer has no subsidiaries or shareholdings in other companies and does not engage in any business other than its principal activity; (vii) No step has been taken by the Issuer nor has any legal proceeding, including winding up proceedings been commenced, instituted or threatened for the dissolution of the Issuer or for the appointment of a receiver, receiver and manager, liquidator, judicial manager or such similar officer over the Issuer; (viii) No event has occurred which constitutes, or which with the giving of notice and/or the lapse of time and/or a relevant determination would constitute, a contravention of, or default under, any agreement or instrument by which the Issuer or any of its assets are bound or affected, being a contravention or default which would have a Material Adverse Effect (as defined in item 1.02(v) below); XVII
73. (ix) No litigation, arbitration or administrative proceeding or claim which would by itself or together with any other such proceedings or claims have a Material Adverse Effect is presently in progress or pending or, to the best of the knowledge, information and belief of the Issuer, threatened against it or any of its assets; (x) All necessary returns have been delivered by or on behalf of the Issuer to the relevant taxation authorities (if any) and the Issuer is not in default in the payment of any taxes; (xi) The audited financial statements of the Issuer have been prepared in accordance with approved accounting principles and standards in Malaysia and give a true and fair view of the results of its operations for each respective financial year and the state of the Issuer’s affairs as at that date, and all of its material liabilities (actual or contingent); (xii) There has been no material adverse change in the financial condition of the Issuer since the date of its latest audited financial statements; (xiii) The Transaction Documents are in full force and effect and create valid and binding obligations which are enforceable on and against the Issuer; (xiv) All information furnished in connection with the Issuer, to the best of its knowledge and belief, do not contain any untrue statement or omit to state any fact the omission of which makes any statement made therein misleading, and the Issuer is not aware of any material facts or circumstances that have not been disclosed to the Lead Arranger which might, if disclosed, adversely affect the decision of a person considering whether or not to provide finance to the Issuer; (xv) Information furnished or to be furnished by the Issuer in connection with the Transaction Documents, information memorandum and application to the SC, do not contain any statement or information that is false or misleading and there is no material omission in respect thereof, and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due care and careful enquiry by the relevant entity; XVIII
74. (v) Events of default, dissolution event and enforcement event, where applicable : (xvi) The Issuer has fully disclosed in writing to the Lead Arranger all facts relating to them which they know or should reasonably know and which are material for disclosure to the Lead Arranger in the context of the Sukuk Murabahah; (xvii) The Issuer is a going concern on the date of the execution of the Transaction Documents; and (xviii) Such other representations and warranties as may be advised by the Solicitors and mutually agreed by the Issuer and the Lead Arranger or as may be required under the Sukuk Guidelines or the Trust Deeds Guidelines. Customary events of default for transactions of this nature which shall include, but not limited to the following: (i) The Issuer fails to pay any amount due (including but not limited to nominal value, profit, fees and other charges) under the Sukuk Murabahah or in accordance with the terms of the Transaction Documents when such payment is due and such failure is not remedied within seven (7) business days; (ii) Failure to meet the requirements with respect to the FSRA Minimum Required Balance and such failure is not remedied within thirty (30) days; (iii) Failure to meet the requirements with respect to the MA 2 Minimum Required Balance and such failure is not remedied within thirty (30) days; (iv) The Issuer is in breach of the FSCR Covenant (as defined in item 1.02(w)(a) below) and such breach is not remedied within twenty one (21) days after the Issuer becomes aware of the breach or upon notification of the breach, whichever is earlier; (v) The Issuer fails to observe or perform any of its obligations under the Transaction Documents or any other document relating to the issue, offer or invitation in respect of the Sukuk Murabahah (other than the obligations described in paragraph (i), (ii), (iii) and (iv) above) which may have a Material Adverse Effect and in the case of a failure capable of remedy, such failure is not remedied within fourteen (14) days of the occurrence of such XIX
75. breach or such other period as may be agreed by the Trustee , to the satisfaction of the Trustee; (vi) Any representation or warranty made or given by the Issuer under any of the Transaction Documents or which is contained in any certificate, document or statement furnished at any time pursuant to the terms of the Sukuk Murabahah and/or any of the Transaction Documents proves to have been incorrect or misleading in any material respect on or as of the date made or given or deemed made or given; (vii) Any guarantee or indebtedness of the Issuer becomes due or capable of being declared due before its stated maturity, any guarantee or similar obligations of the Issuer is not discharged at maturity or when called or the Issuer goes into default under, or commits a breach of, any instrument or agreement relating to any such indebtedness, guarantee or other obligation or when any security created for any indebtedness of the Issuer becomes enforceable; (viii) The Issuer fails to satisfy any judgement exceeding RM5.0 million passed against it by any court of competent jurisdiction and no appeal against such judgement has been made to any appropriate appellate court within the time prescribed by law or such appeal has been dismissed; (ix) Any step is taken for the winding up, dissolution or liquidation of the Issuer or a resolution is passed for the winding up of the Issuer or a petition for winding up is presented against the Issuer and the Issuer has not taken any action in good faith to set aside such petition within thirty (30) days from the date of service of such winding up petition or a winding up order has been made against the Issuer; (x) The Issuer convenes a meeting of its creditors or proposes or makes any arrangement (including any scheme of arrangement pursuant to Section 176 of the Companies Act, 1965) or composition with or begins negotiations or takes any proceeding or other step with a view to a rescheduling or deferral of all or any part of its indebtedness or a moratorium is agreed or declared by a court of competent jurisdiction in respect of or affecting all or any part of its indebtedness, or XX
76. any assignment for the benefit of its creditors (other than for the purposes of and followed by a reconstruction previously approved in writing by the Trustee, unless during or following such reconstruction the Issuer becomes or is declared to be insolvent); (xi) An encumbrancer takes possession of, or a trustee, liquidator, receiver or similar officer is appointed in respect of, all or any part of the business or assets of the Issuer, and which in the opinion of the Trustee may have a Material Adverse Effect, or any security interest which may for the time being affect any of its assets becomes enforceable; (xii) If there should occur any revocation, withholding, invalidation, modification or termination of any licences, authorisation, permits or approvals that impairs or prejudices the ability of the Issuer to comply with the terms and conditions of the Transaction Documents or any other agreements relating to the issue, offer or invitation in respect of the Sukuk Murabahah; (xiii) The Issuer is deemed unable to pay any of its debts (as defined under section 218(2) of the Companies Act, 1965) or becomes unable to pay any of its debts as they fall due or suspend or threaten to suspend making payments with respect to all or any class of its debts; (xiv) Any creditor of the Issuer exercises a contractual right to take over the financial management of the Issuer and such event in the opinion of the Trustee may have a Material Adverse Effect; (xv) At any time any of the provisions of the Transaction Documents is or becomes illegal, void, voidable or unenforceable; (xvi) The Issuer repudiates any of the Transaction Documents or the Issuer does or causes to be done any act or thing evidencing an intention to repudiate any of the Transaction Documents; (xvii) Any of the assets, undertakings, rights or revenue of the Issuer are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any governmental body which in the opinion of the Trustee may have a Material Adverse Effect; XXI
77. (xviii) Any event or events has or have occurred or a situation exists which in the opinion of the Trustee may have a Material Adverse Effect, and in the case of the occurrence of such event or situation which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy it within a period of thirty (30) days after the Issuer becomes aware or having been notified by the Trustee of the event or situation or such other remedy period as may be allowed under the Transaction Documents for the relevant event or situation; (xix) The Issuer changes or threatens to change the nature or scope of a substantial part of its business, or suspends or threatens to suspend or cease or threatens to cease the operation of a substantial part of its business which it now conducts directly or indirectly and such change or suspension or cessation in the opinion of the Trustee may have a Material Adverse Effect; (xx) The Concession Agreement and Supplemental Concession Agreement are suspended, terminated, illegal, invalid or ceases to be in full force and effect; or (xxi) Such other events of default as may be advised by the Solicitors and mutually agreed by the Issuer and the Lead Arranger or as may be required under the Sukuk Guidelines or the Trust Deeds Guidelines. The Trustee may at its discretion and shall, upon the instruction of the Sukukholders by way of extraordinary resolution, subject to it being indemnified to its satisfaction, issue a notice to the Issuer declaring that an Event of Default has occurred and all sums payable by the Issuer under the Sukuk Murabahah shall become immediately due and payable in full whereupon the Trustee shall be entitled to immediately enforce the security created under the security documents, without further notice to the Issuer. For the purpose of the principal terms and conditions of the Sukuk Murabahah, “Material Adverse Effect” means any material adverse effect on: (i) the business or condition (financial or otherwise) or results of the operations of the Issuer, (ii) the ability of the Issuer to perform any of its obligations under any of the Transaction Documents, (iii) the validity or enforceability of any of the Transaction Documents and/or (iv) the rights or remedies of the Trustee or the Sukukholders thereunder. XXII
78. (w) Covenants : (a) Financial Covenant The Issuer shall maintain a Finance Service Cover Ratio (“FSCR”) of at least 1.25 times for so long as any Sukuk Murabahah remains outstanding (“FSCR Covenant”). The FSCR is the ratio of Available Cashflow (as defined in item 1.02(w)(a) herein) to the aggregate of all principal obligations and profit payments under the Sukuk Murabahah which are due and payable in the preceding twelve (12) months. For any applicable twelve (12) months period, the “Available Cashflow” shall mean the aggregate of: (i) all cash balances and cash in the Designated Accounts at the beginning of the relevant twelve (12) months period; (ii) all income and revenue received by the Issuer under the Concession Agreement and any other receipts of capital or revenue in nature under any contract or agreement; and (iii) all distributions, returns and realised gains received by the Issuer, Less: (i) the total amount paid on takaful, operations, maintenance, administration, management, overheads and expenses; i. taxes paid or such other contributions paid by the Issuer; and ii. capital expenditure incurred and paid by the Issuer (if any). The FSCR calculations shall be duly confirmed by the Issuer’s external auditor based on the latest audited financial statements of the Issuer on an annual basis. For the avoidance of doubt, any double counting shall be disregarded. If the Issuer is in breach of the FSCR Covenant, the Issuer shall after becoming aware of the breach or upon notification of the breach, whichever is earlier, remedy the breach within a period of twenty one (21) days. XXIII
79. (b) Positive Covenants The Issuer covenants, including but not limited to the following: (i) The Issuer shall undertake to act in accordance with the Security Trustee’s instructions upon the occurrence of an Event of Default; (ii) The Issuer shall notify the Trustee of all claims made against it, shall defend itself against such claims and shall not settle such claims except with the prior written consent of the Trustee; (iii) The Issuer shall obtain and maintain in full force and effect all relevant authorisations, consents, rights, licenses, approvals and permits (governmental and otherwise) and will promptly obtain any further authorisations, consents, rights, licenses, approvals and permits (governmental and otherwise) which is or may become necessary to enable it to (i) own its assets, to carry on its business or (ii) for the Issuer to enter into or perform its obligations under the Transaction Documents or to ensure the validity, enforceability, admissibility in evidence of the obligations of the Issuer or the priority or rights of the Sukukholders under the Transaction Documents, and the Issuer shall comply with the same; (iv) The Issuer shall open and maintain each of the required Designated Accounts and the Trustees’ Reimbursement Account and pay all amounts into such accounts and make all payments from such accounts as required under the Transaction Documents; (v) The Issuer shall exercise or cause to be exercised reasonable diligence in carrying on and operating its business and affairs in a proper and efficient manner, in accordance with sound financial and commercial standards and in accordance with its Memorandum and Articles of Association; (vi) The Issuer shall perform all its obligations and comply at all times with the provisions under the Transaction Documents and ensure that it shall immediately notify the Trustee in the event that the Issuer is XXIV
80. unable to fulfil or comply with any of the provisions of the Transaction Documents ; (vii) The Issuer shall keep proper books and accounts at all times and prepare financial statements in accordance with generally accepted accounting principles and to provide the Trustee and any person appointed it (e.g. auditors) access to such books and accounts to the extent permitted by law; (viii) The Issuer shall give to the Trustee any information which the Trustee may reasonably require in order to discharge its duties and obligations under the Trust Deed, relating to the Issuer’s affairs to the extent permitted by law; (ix) The Issuer shall maintain a paying agent or its equivalent in Malaysia; (x) The Issuer shall procure the paying agent to notify the Trustee, through the Facility Agent, if the paying agent does not receive payment from the Issuer on the relevant due dates as required under the Transaction Documents and the terms and conditions of the Sukuk Murabahah; (xi) The Issuer shall ensure that the terms in the Trust Deed do not contain any matter which is inconsistent with the provisions of an information memorandum relating to the Sukuk Murabahah; (xii) The Issuer shall issue and deliver invoices in respect of the Concession Payments to UiTM in a timely manner and as prescribed under the Concession Agreement; (xiii) The Issuer shall at all times on demand execute 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; (xiv) The Issuer shall cause all advances made by its directors and/or shareholders and/or related companies including the Junior Sukuk subscribed by its shareholders to be subordinated to the Sukuk Murabahah and no repayment and/or prepayment of such advances and the Junior Sukuk shall be made so long XXV
81. as any Sukuk outstanding ; (xv) Murabahah remains The Issuer shall cause all Concession Payments (including Availability Charges but excluding Maintenance Charges and the Maintenance Reserve Fund) to be remitted directly into the Revenue Account; (xvi) The Issuer shall cause all Maintenance Charges to be remitted directly into the Maintenance Account 1; (xvii) the Issuer shall provide the Trustee reasonable access to inspect relevant documents in relation to the maintenance services at all reasonable times provided prior notice has been given to the Issuer; (xviii) The Issuer shall ensure that the paid-up capital of UniTapah be maintained at least RM5.0 million; and (xix) The Issuer shall deliver to the Security Trustee and RAM Ratings a copy of (a) the quarterly statement of the Designated Accounts and (b) the quarterly maintenance reports. (c) Reporting Covenants (i) The Issuer shall immediately notify the Trustee if the Issuer becomes aware: (A) of any Event of Default; (B) of any change in its conditions (financial or otherwise) which may have a Material Adverse Effect; (C) of the happening of any event that has caused or could cause, one or more of the following: XXVI (I) any amount secured or payable under the Sukuk Murabahah to become immediately payable; (II) the Sukuk Murabahah to become immediately enforceable; or (III) any other right or remedy
82. under the terms , provisions or covenants of the Transaction Documents to become immediately enforceable; (D) of any circumstances that has occurred that would materially prejudice the Issuer or any security included in or created by the Sukuk Murabahah; (E) of any substantial change in the nature of the business of the Issuer; (F) of any change in the withholding tax position; (G) of any change in the utilisation of proceeds from the Sukuk Murabahah where the information memorandum or any agreement entered into in connection with the issue, offer or invitation which sets out a specific purpose for which proceeds are to be utilised; (H) of any litigation, arbitration or administrative proceeding or claim, or the occurrence of any other event, which may by itself or together with any other such proceedings, claims or events have a Material Adverse Effect and provide the Trustee with such details; and (I) (ii) of any other matter that may materially prejudice the interest of the Sukukholders; The Issuer shall deliver to the Trustee: (A) within one hundred and eighty (180) days after the end of each of its financial year copies of its audited financial statements; and (B) within ninety (90) days after the end of each half of its financial year copies of its unaudited financial statements, and any other accounts, report, notice, statement or circular issued to its shareholders, and shall provide for the accounts, report, notice, statement or circular to be circulated by the Trustee at its discretion to the Sukukholders as well as the RAM Ratings; and XXVII
83. (iii) The Issuer shall provide to the Trustee at least on an annual basis, a certificate confirming that it has complied with all its obligations under the Transaction Documents and that there does not exist or had not existed, from the first date the Sukuk Murabahah were issued or the date of the previous certificate, as the case may be, any Event of Default, and if such is not the case, to specify the same. (d) Negative Covenants The Issuer, without the prior written consent of the Trustee, shall not do the following, which include but are not limited to: (i) The Issuer shall not carry out any other business or activities other than the authorised business or activities; (ii) The Issuer shall not dissolve its affairs or consolidate with or merge into any other entity; (iii) The Issuer shall not reduce its authorised or paid-up and issued share capital; (iv) The Issuer shall not sell, transfer, assign or otherwise dispose of all or a substantial portion of its assets, property and undertaking (if any); (v) The Issuer shall not add to, delete, vary or amend its Memorandum and Articles of Association in any manner whatsoever save as permitted hereunder; (vi) The Issuer shall not make, assume or permit to exist any other loans or grant advances to others or provide or extend any credit or accommodation or provide any guarantee, indemnity or assurance against loss to or for the benefit of any person, enterprise or company or act as surety or otherwise voluntarily assume any liability, whether actual or contingent except for (i) the existing advances made to its related companies or shareholders, (ii) as permitted under the Transaction Documents and (iii) the one-off Internal Transfer to its shareholders and/or ultimate holding company in the amount of not more than RM180.0 million from the proceeds of the Sukuk Murabahah; XXVIII
84. (vii) The Issuer shall not create or permit to exist any encumbrance, mortgage, charge (whether fixed or floating), pledge, lien, assignment by way of security, trust arrangement for the purpose of providing security or other security interest of any kind over any of its assets and the Concession Agreement, including, without limitation, title transfer and/or retention arrangements having a similar effect or any agreement to create any of the foregoing, except for those permitted and to be agreed upon prior to signing of the Transaction Documents, and liens arising in the ordinary course of operations and by operation of law and not by way of contract; (viii) The Issuer shall not cancel, surrender, abandon or otherwise change in a material manner the nature or scope of its existing business nor suspend or threaten to suspend a substantial part of its business in any manner which may have a Material Adverse Effect; (ix) The Issuer shall not pay any dividends or bonus issue or make any distribution (be it income or capital in nature) for so long as any Sukuk Murabahah remains outstanding, except for the one-off Internal Transfer of not more than RM180.0 million from the proceeds of the Sukuk Murabahah; Notwithstanding the above, the Issuer may declare dividends to its shareholders subject to the Issuer not exceeding a distribution finance to equity ratio (“Distribution F:E Ratio”) of 5.67 times prior to the declaration of such dividends and after the declaration of such dividends. For the avoidance of doubt, any dividends declared by the Issuer shall not be payable for so long as any Sukuk Murabahah remains outstanding. The Distribution F:E Ratio is the ratio of indebtedness of the Issuer represented by principal amounts of all outstanding Sukuk Murabahah to the Issuer’s shareholders’ funds including, if any, ordinary share, redeemable preference shares, subordinated shareholders’ advances, Junior Sukuk and retained earnings/losses. For the avoidance of doubt, any double counting shall be disregarded. XXIX
85. The calculation of the Distribution F :E Ratio shall be duly confirmed by the Issuer’s external auditors and the Issuer’s board of directors as and when such calculations are required to be made under the terms of the Transaction Documents. (x) The Issue shall not make any profit payments for the Junior Sukuk and make any partial or full redemption of the Junior Sukuk for so long as any Sukuk Murabahah remain outstanding; (xi) The Issuer shall not do or suffer to be done any act, matter or thing whereby any takaful may be rendered void, voidable or incapable of being effected, maintained or renewed, nor permit any other act to be done whereby any takaful or any provision thereof may be suspended, impaired or defeated; (xii) The Issuer shall not incur, assume or permit to exist any indebtedness for borrowed monies, except for the Sukuk Murabahah and Junior Sukuk; (xiii) The Issuer shall not terminate or materially amend any material agreement or licence which may have a Material Adverse Effect; (xiv) The Issuer shall not enter into a transaction, whether directly or indirectly with interested persons unless (i) such transactions shall be on terms that are no less favourable to the Issuer which could have been obtained in a comparable transaction from persons who are not interested persons; and (ii) with respect to transactions involving an aggregate payment or value equal to or greater than RM5.0 million, the Issuer obtains certification from an independent adviser that the transaction is carried out on fair and reasonable terms; provided that the Issuer certifies to the Trustee that the transaction complies with paragraph (i), that the Issuer has received the certification referred to in paragraph (ii) (where applicable) and that the transaction has been approved by the majority of the board of directors or shareholders in a general meeting as the case may require; (xv) XXX Save for the (i) one-off Internal Transfer in the aggregate amount of RM180.0 million to its shareholders and/or ultimate holding
86. company from the proceeds of the Sukuk Murabahah ; (ii) payment of annual management fees to its ultimate holding company; and (iii) any other transactions contemplated hereunder (including the issuance of the Junior Sukuk), the Issuer shall not enter into any other transaction with its shareholders, ultimate holding company and/or related companies; (xvi) Except otherwise contemplated in the Transaction Documents, the Issuer shall not enter into any agreement with its shareholders, subsidiaries or associated companies unless such agreement is entered into: (A) in the ordinary course of its business; (B) on an arms-length basis; and (C) will not have a Material Adverse Effect; (xvii) The Issuer shall not change the utilisation of proceeds from the Sukuk Murabahah where the information memorandum or any agreement entered into in connection with the issue, offer or invitation sets out a specific purpose for which the proceeds of the Sukuk Murabahah are to be utilised; (xviii) The Issuer shall not terminate, revoke, suspend, modify or waive any conditions of the Concession Agreement and Supplemental Concession Agreement or release or vary the liability of any person from time to time liable thereunder; (xix) No changes to the shareholding structure of the Issuer resulting in Crest Builder Holdings Berhad not having a minimum of 51% control (directly or indirectly) over the issuer; (xx) The Issuer shall not put to its directors or shareholders any resolution for, or appoint any liquidator for, its winding up or any resolution for the commencement of any bankruptcy or insolvency proceeding with respect to it; (xxi) The Issuer shall not open or maintain any account other than the Designated Accounts, Trustees’ Reimbursement Account and Maintenance Reserve Fund Account (as defined in item 1.02(y)(xvi) XXXI
87. below ); and (xxii) The Issuer shall not amend, vary, replace or terminate the Concession Agreement and the Supplemental Concession Agreement; without the prior written consent of the Trustee (acting on behalf of the Sukukholders), save for any amendments as may be required by the Government or due to any regulatory or legal requirements whereby the consent of the Trustee shall not be required but the Issuer shall immediately notify the Trustee of such changes/amendments. (e) Other Covenants Such other covenants as may be advised by the Solicitors and mutually agreed by the Issuer and the Lead Arranger or as may be required under the Sukuk Guidelines or the Trust Deeds Guidelines. (x) Provisions on buyback and early redemption of sukuk : The Issuer or any of its subsidiaries or its agent(s) or any interested person of the Issuer, which includes the directors, major shareholders and chief executive officer, may at any time purchase the outstanding Sukuk Murabahah at any price in the open market or by private treaty. The Sukuk Murabahah purchased by the Issuer or by its subsidiaries or by agent(s) who is acting for the purchase shall be cancelled and may not be resold or reissued. Any Sukuk Murabahah held by any interested person of the Issuer (who shall include directors, major shareholders and chief executive officer) shall not entitle such interested person to vote at any of the meetings of the Sukukholders and will not be deemed to be outstanding for the purpose of determining the total votes exercisable by the Sukukholders whenever such determination is required under the Transaction Documents. The Issuer shall not early-redeem any Sukuk Murabahah prior to its maturity. (y) Other principal terms and conditions for the proposal: (i) Trustees’ Reimbursement Account : The Issuer shall open and maintain an account designated as “Trustees’ Reimbursement Account” (as required under the SC’s Trust Deeds Guidelines revised on 12 July 2011 and effective on 12 August 2011 (“Trust Deeds Guidelines”)), in which a sum of RM30,000.00 from the monies received by the Issuer when the Sukuk XXXII
88. Murabahah are issued are to be deposited (“Trustees’ Reimbursement Account”). The Trustees’ Reimbursement Account shall be solely operated by the Trustee and the monies shall only be used strictly by the Trustee in carrying its duties in relation to the occurrence of events of default or enforcement events which are provided in the Trust Deed. The sum of RM30,000.00 in the Trustees’ Reimbursement Account shall be maintained for so long as any Sukuk Murabahah remains outstanding. (ii) Issue price : The Sukuk Murabahah may be issued, at a premium, at par or at a discount and the issue price shall be calculated in accordance with the MyClear Procedures. (iii) Form and denomination : The Sukuk Murabahah shall be issued in accordance with the MyClear Rules and Procedures applicable from time to time. Each tranche of the Sukuk Murabahah shall be represented by a global certificate to be deposited with BNM, and is exchanged for definitive bearer form only in certain limited circumstances. The denomination of the Sukuk Murabahah shall be RM1,000,000.00 or in multiples of RM1,000,000.00 at the time of issuance or such other denomination as may be mutually agreed between the Issuer and the Lead Arranger (unless required to be in such other denominations in accordance with the MyClear Rules and Procedures and/or any other relevant guidelines). (iv) Redemption (v) Status sukuk (vi) Documentation of the : The Sukuk Murabahah shall be redeemed at the price of 100% of their nominal amount upon maturity. : The Sukuk Murabahah will, upon issue, constitute direct, secured, unconditional and unsubordinated obligations of the Issuer and shall at all times, rank pari passu, without discrimination, preference or priority amongst themselves, rank at least pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer, and, in respect of assets subject to security created by the Transaction Documents, in priority to all other present and future unsecured and unsubordinated obligations of the Issuer, except for those obligations preferred by mandatory provisions under applicable Malaysian laws. : Documentation for the Sukuk Murabahah include interalia the following documents: (a) (b) (c) (d) (e) Trust Deed; Debenture; Subscription Agreement; Assignment and Charge over the Designated Accounts; Sukuk Murabahah; and XXXIII
89. (f) Such other relevant documentation which may be advised by the Solicitors, including the Islamic documents. (the above documents are collectively referred to as the “Transaction Documents”) (vii) Permitted Investments : The funds standing to the credit of the Designated Accounts may be placed in permitted investments limited to the following (“Permitted Investments”) which shall comprise investment products approved by the SAC, BNM’s Shariah Advisory Council and/or other recognised Shariah authorities: (d) Accounts maintained with a Shariah compliant financial institution with a minimum credit rating of A3/P1 and/or A+/MARC-1; (e) Money market instruments of a Shariah compliant financial institution with a minimum credit rating of A3/P1 and/or A+/MARC-1; and (f) Islamic treasury bills, Islamic money market instruments, and other Islamic instruments or sukuk issued by BNM or the Government, subject to the following: 1. The maturity of the Permitted Investments in securities shall fall on a date, which is at least five (5) business days before the next profit payment date or the maturity date, whichever is earlier. However, the maturity of the Permitted Investment in money market instruments of a financial institution and accounts maintained with financial institutions shall fall on a date, which is at least two (2) business days before the next profit payment date or the maturity date, whichever is earlier save that this condition shall not apply to any placement of money with the Facility Agent; and 2. The Permitted Investments being denominated in Ringgit Malaysia. (viii) Expenses : All costs, charges and expenses including but not limited to trustee and security trustee fee, legal and other professional fees, abortive fees, rating fees, stamp duties (if any), penalties, SC and BNM fees, and other incidental costs, charges and expenses pertaining and/or related to the issuance of the Sukuk Murabahah shall be borne by the Issuer, even if the transaction contemplated herein is aborted for any reason whatsoever. (ix) Other conditions : The Sukuk Murabahah shall at all times be governed by the guidelines issued and to be issued from time to time by the SC, BNM and MyClear over matters pertaining to the XXXIV
90. Sukuk Murabahah . (x) Taxation : All payments by the Issuer in connection with the Sukuk Murabahah shall be made free and clear of all and without deductions for all present and future taxes, duties, levies or withholdings of whatever nature unless such withholding or deduction is required by law, in which event the Issuer shall be required to make payment of such additional amount so that the payee would receive the full amount which the payee would have received if no such withholding or deduction is made. (xi) Jurisdiction : The Issuer shall unconditionally and irrevocably submit to the non-exclusive jurisdictions of the courts of Malaysia. (xii) Governing law : The Sukuk Murabahah and the Transaction Documents shall be governed by the laws of Malaysia. (xiii) Ta’widh (Compensation) : In the event of any delay in payments of the Deferred Sale Price, the Issuer shall pay the compensation on such delayed payments at the rate and manner prescribed by the SAC from time to time in accordance with Shariah. (xiv) Certificate Acceptance : Certificate issued by UiTM to UniTapah dated 18 January 2014 confirming the acceptance of the availability of the facilities and infrastructure in accordance with the Concession Agreement. (xv) Maintenance Charges : Amount payable to UniTapah by UiTM for the provision of the maintenance works as stipulated in Concession Agreement. (xvi) Maintenance Reserve Fund : A sinking fund established which shall be jointly managed and controlled and shall be held in a separate bank account opened in joints names of UiTM and UniTapah as stipulated in the Concession Agreement (“Maintenance Reserve Fund Account”). (xvii) Availability Charges : Sub-lease rental payable to the UniTapah by UiTM for the availability of the facilities and infrastructure as stipulated in the Concession Agreement. of (The rest of this page has been intentionally left blank) XXXV
91. APPENDIX 1 7 ) Pay Deferred Sale Price 1b) Issue Purchase Order 1a) Appoint Wakeel 3) Subscribe to Sukuk 2) Pay Purchase Price i.e. Issue proceeds Sukukholders 3) Issue Sukuk Facility Agent / Wakeel 4) Purchase commodities on spot at Purchase Price, through a Commodity Trading Participant (“CTP”) Step 1 5) Sell commodities at Deferred Sale Price UniTapah (Commodity Purchaser/Issuer) 6) Sell commodities on spot basis at Purchase Price equivalent, through CTP 1a. The investor(s) (“Sukukholders”) shall appoint the Facility Agent to act as the buying and selling agent (“Wakeel”) of Shariah-compliant commodities (“Commodities”). 1b. Subsequently, UniTapah (“Issuer”) shall issue a Purchase Order (“Purchase Order”) to the Sukukholders through the Wakeel for the purchase of the Commodities. The Purchase Order constitutes a unilateral binding promise (Wa’d Mulzim) by the Issuer to purchase the commodities at a sale price to be paid on a deferred payment basis (“Deferred Sale Price”). The Deferred Sale Price represents the purchase price (“Purchase Price”) and the profit portion to be agreed between the Issuer and the Wakeel. Step 2 Pursuant to the Purchase Order from the Issuer, the Sukukholders shall pay to the Wakeel the Purchase Price of the Commodities which is equivalent to the amount to be disbursed under the Sukuk Murabahah. Step 3 The Issuer shall issue, and the Sukukholders shall subscribe, to the Sukuk Murabahah issued by the Issuer to evidence the Sukukholders’ ownership in the Commodities and subsequently represent the Sukukholders’ entitlement to receive the Deferred Sale Price once the Commodities are sold to the Issuer. Step 4 Upon receipt of the Purchase Price, the Wakeel, on behalf of the Sukukholders shall then purchase the Commodities from commodity vendor(s) in the Bursa Suq Al-Sila’ commodity market, through a Commodity Trading Participant (“CTP”), who will facilitate the buying and selling of the Commodities on a spot basis. Bursa Suq Al-Sila’ is a commodity trading platform with multiple commodity vendors. Upon completion of the purchase, the Wakeel, on behalf of the Sukukholders shall sell the Commodities to the Issuer at the Deferred Sale Price. Step 5 Step 6 Subsequently, UniTapah shall sell the Commodities via the same CTP to Bursa Malaysia Islamic Services Sdn Bhd on a spot basis at an amount equivalent to the Purchase Price. Step 7 UniTapah shall pay the Deferred Sale Price via the Wakeel to the Sukukholders.
92. APPENDIX II Audited Financial Statements of the Issuer for the Financial Year Ended 31 December 2013
154. APPENDIX III Shariah Pronouncement
160. ISSUER UNITAPAH SDN BHD (846665-X) Penthouse, The Crest, 3 Two Square, 2, Jalan 19/1 46300 Petaling Jaya, Selangor Darul Ehsan PRINCIPAL ADVISER/LEAD ARRANGER/LEAD MANAGER Kenanga Investment Bank Berhad (15678-H) Level 10, Kenanga International Jalan Sultan Ismail 50250 Kuala Lumpur FACILITY AGENT TRUSTEE/SECURITY TRUSTEE Kenanga Investment Bank Berhad (15678-H) Level 10, Kenanga International Jalan Sultan Ismail 50250 Kuala Lumpur Pacific Trustees Berhad (317001-A) Unit A-9-8, 9th Floor Megan Avenue 1 No, 189, Jalan Tun Razak Off Persiaran Hampshire 50400 Kuala Lumpur REPORTING ACCOUNTANT SOLICITORS TO THE PRINCIPAL ADVISER/LEAD ARRANGER/LEAD MANAGER Messrs. Baker Tilly Monteiro Heng Baker Tilly MH Tower Level 10, Tower 1, Avenue 5 Bangsar South City 59200 Kuala Lumpur Messrs. Adnan Sundra & Low Level 11, Menara Olympia No. 8, Jalan Raja Chulan 50200 Kuala Lumpur