ALI studies Sukuk financing
Property developer Ayala Land Inc. is considering Sukuk financing to fund its investments in Malaysia.
“We are talking with a couple of banks to explore Sukuk financing,” Ayala Land chief finance officer Jaime Ysmael told reporters at the sidelines of the Asean Capital Markets and Investment Summit sponsored by The Asset magazine.
Sukuk is an Islamic financial certificate, which is similar to a bond, that complies with Sharia, or Islamic religious law.
Ysmael said raising funds through Sukuk to finance Ayala Land’s investment in Malaysia would remove foreign exchange risks.
He said Sukuk financing was one of the options being considered by Ayala Land.
“We are still studying and exploring possible options. But for now a peso and dollar debt still makes sense,” Ysmael said,
“We are talking with banks if we can match it [Ayala Land’s investment in Malaysia] with Ringgit denominated loan, either through Sukuk or note or bilateral bank debt,” Ysmael said.
Ayala Land in April acquired a 9.16-percent interest in MCT Bhd through a private placement amounting to $43 million (P1.9 billion).
The stake in the Malaysian company marked Ayala Land’s first significant investment in Southeast Asia.
Ayala Land, through wholly owned subsidiary Regent Wise Investments Limited signed call option agreements with the two founders and majority shareholders of the Malaysian firm in May that will enable the property firm to increase its stake in MCT to 32.95 percent.
The call options are exercisable for one month beginning Oct. 2015.
Ayala Land earlier said the investment in MCT Bhd would allow it to enter the Malaysian market with an experienced team, benefit from synergies of the partnership and further add value to MCT over the long term to enable it to become a key player in the Malaysian real estate market.
Aside from Malaysia, Ayala Land is also looking at investment opportunities in Vietnam, Indonesia and Myanmar.
Established in 1999 as a construction company, MCT Bhd is a property development company specializing in mixed-use projects that include retail, office, hotel and mid- to affordable residential units.
MCT Bhd listed under the main market of Bursa Malaysia and has several ongoing projects in One City Subang Jaya and Cyberjaya, as well as a land bank in Dengkil, 1.5 kilometers away south of Cyberjaya, all located in the Klang Valley in Malaysia.