Golden Agri-Resources Raises $490 Million From Sukuk
Golden Agri-Resources, one of the world’s largest palm oil companies, announced on Monday that it raised 1.5 billion ringgit ($490 million) from selling five-year Islamic medium-term notes, called sukuk.
The sale is part of a larger plan to sell up to 5 billion ringgit in notes, the company said in a statement published on its website on Monday.
The notes will mature in November 2017, it said.
The company considers Malaysia the ideal location for the sale of its sukuk given the country’s well-established and advanced sukuk market with abundant liquidity, coupled with its familiarity with the palm oil industry in general, Golden Agri-Resources said.
The company hired OSK Investment Bank and RHB Investment Bank as the financial advisers for the Shariah compliant notes.
Franky O. Widjaja, the company’s head, said that the sukuk sale should help strengthen the company’s balance sheet.
“We believe that the sukuk will support GAR’s strategy by strengthening its balance sheet, extending the overall debt maturity profile, maximizing financial flexibility, and enhancing GAR’s position to execute internal and external growth plans,” Franky said in a the statement.
Golden Agri-Resources is the world’s second largest palm oil plantation company, with a total planted area of 459,500 hectares — including smallholders — as of Sept. 30. Its major plants are located on Sumatra.
The company, founded in 1996, has been listed on the Singapore Exchange since 1999, with market capitalization at $6.6 billion as of Oct. 31. Flambo International, an investment company, is its largest shareholder, with a 49.95 percent stake.
Golden Agri-Resources has several subsidiaries, including Smart, which has been listed on the Indonesia Stock Exchange since 1992.
In Indonesia, its primary activities include cultivating and harvesting oil palm trees; processing fresh fruit bunches into crude palm oil and palm kernel, and refining CPO into value-added products such as cooking oil, margarine and shortening.