TDM Bhd announced that it will undertake a debt rationalisation exercise which will involve the full settlement of the outstanding Indonesian Rupiah Notes (“IDR Notes”) held by the Group’s Indonesian subsidiary, PT Rafi Kamajaya Abadi (“PT RKA”).
Under the debt rationalisation exercise, the Group will utilize a USD105 million (equivalent to RM434.3 million based on exchange rate of US$1 : RM4.14) credit facility in the form of a Foreign Currency Revolving Credit-i (“FCRC-i”) Commodity Murabahah to fully settle the Group’s outstanding IDR Notes used for TDM’s plantation operations in Kalimantan, Indonesia.
Subsequently, TDM will redeem its investment in fixed income securities, of which the proceeds will be used to fully settle the principal portion of the USD105 million FCRC-i.
Upon completion of the exercise, the Group’s total interest-bearing borrowings and gearing will reduce to RM476.6 million and 0.41 times from RM766.6 million and 0.68 times respectively as at 30 June 2018.
Chairman of TDM, YM Raja Dato’ Idris Raja Kamarudin said, “This debt rationalisation exercise is a step in the right direction for us. In addition to improving our financial performance by way of savings in future finance costs, the redemption of our fixed income investment will also eliminate the fluctuations in gains and losses arising from currency movements.”
Another positive outcome arising from this exercise is that TDM will be able to meet the Securities Commission’s criteria of being a Shariah compliant counter on Bursa Malaysia. This is expected to enhance the Group’s attractiveness to a wider audience of investors.
In addition, TDM’s wholly owned subsidiary, Kumpulan Ladang-Ladang Terengganu Sdn Bhd has also accepted a RM48.9 million credit facility to part finance its replanting and plantation development expenditure at the Group’s plantations in Terengganu. This will support the Group’s long term production growth by focusing on replanting of old plantations with new, high yield planting materials.