Sime Darby Plantation Refinanced RM3.9 billion Credit Facilities in Malaysia and Indonesia on Improved Terms

Kuala Lumpur, 30 January 2020 – Sime Darby Plantation Berhad (SDP) is pleased to announce that the Group had in December 2019 completed the refinancing of its credit facilities worth approximately RM3.9 billion on marginally improved terms. The RM3.9 billion financing facilities secured by the Group in December 2019 consist of foreign currency term loans of USD830 million and a Ringgit term loan of RM500 million. In line with the Group’s aspiration to refinance its existing facilities with Islamic financing, approximately 81% of the facilities were secured via Shariah compliant instruments in this recent refinancing exercise.
The refinancing exercise was undertaken to review SDP Group’s loan portfolio and to balance its debt maturity profile to be in line with cash flow expectations, while taking advantage of attractive market rates. The exercise involved refinancing of SDP’s existing term loans which are due for repayment in June 2020, restructuring and replacing some of the existing facilities with better pricing as well as converting some of the Group’s working capital facilities to term loans but the exercise did not result in any increase in the Group’s gearing. The Group’s borrowing as at 30 September 2019 stood at approximately RM7.9 billion (excluding Perpetual Sukuk of RM2.2 billion).
SDP’s Group Managing Director, Mohamad Helmy Othman Basha commented that the refinancing is an integral part of SDP’s ongoing efforts to proactively manage and optimise its debt profile, as well as alleviate the Group's current liquidity exposures.
“This refinancing exercise has not only resulted in a lower cost of debt for us, but it has also improved the debt maturities and increased SDP’s financial flexibility to manage our operations and finances. We are now in a better position to devote our management efforts towards enhancing operational efficiencies and reducing costs, while we continue to focus on executing our asset monetisation plans.
The Group remains on track in its deleveraging exercise via excess operational cash flows as well as cash flows from major assets sales comprising of land sales which we had previously announced and sale of other non-core assets. Upon the realisation of our deleveraging plans, we hope to reduce the Group’s gross gearing ratio from 49 percent as at 30 September 2019 to approximately 30 percent within the next three years,” said Helmy.
“I believe SDP and its shareholders will progressively enjoy the fruits of the financial transformation that we have been diligently pursuing, as we continue to strengthen our balance sheet. We would also like to take this opportunity to record our deepest appreciation to all the financial institutions that have continuously provided strong support to the Group. Our lending partners are truly instrumental as the Group moves forward in 2020,” he added.
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