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AC First Genesis makes progress in fulfilling remaining conditions subsequent to First Tranche Sukuk Ijarah, gets another extension
Published on 08 Dec 2023.
AC First Genesis Berhad (the Issuer) has obtained another three-month extension to comply with remaining conditions subsequent to its RM785 mil First Tranche Sukuk Ijarah. This is the fifth extension to date following sukukholders’ approval to extend the deadline from 20 June to 20 October 2023 (click here). The Issuer is in the final stages of fully meeting the said conditions in the run-up to the new deadline (20 January 2024).
After obtaining an additional 50% reduction in the Memorandum of Transfer (MOT) registration fee on 31 October 2023 (from RM1.88 mil to RM938,000), Great Realty Sdn Bhd (the Originator) fully settled the amount due and presented the MOT as well as the discharge and creation of the charge over Aman Central Mall (asset underlying the transaction) at the Kedah land office on 22 November 2023. On 29 November, the power of attorney given to the sukuk trustee to manage and dispose of the Mall upon occurrence of a trigger event was presented at the land office. How quickly the said condition can be fulfilled will depend on the land office’s processing time. We understand that it usually responds within a month from the date of presentation, which makes compliance by the extended deadline achievable.
As with previous time extensions, among other prerequisites, no profit payment on the Subordinated Class D Sukuk may be made until all conditions subsequent have been met. The sukukholders have granted the Issuer indulgence to waive the Tranche Event of Default in view of the 20 October missed deadline.
Overall, we view the transaction’s prolonged exposure to an incomplete security position as undesirable, particularly as Aman Central is the sole security and cash flow source to service the First Tranche Sukuk Ijarah. The time extension however will not have any rating impact, considering material progress made to date. We will continue to monitor developments on this front.
Aman Central Mall is an eight-storey retail mall in Alor Setar, Kedah. The transaction’s ultimate sponsor is Belleview Group, a niche property developer in the northern region with a track record dating back to 1984. Its core business encompasses the development of residential properties, townships, offices and shopping malls, and asset management for sale and investment. The Mall was previously held via the Group’s wholly owned subsidiary, Great Realty, before it was securitised under the sukuk programme in May 2021.
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Sakinah Arifin
(603) 3385 2500
sakinah@ram.com.my
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