International Finance

Serba Dinamik to raise sukuk issuance up to RM1 billion over three years

AmInvestment Research is optimistic about Serba Dinamik’s ‘O&M business model’, which is expanding its ‘long-term recurring earnings’

Malaysian Serba Dinamik is planning to raise a sukuk issuance up to RM1 billion for a period of three years to finance existing loans and international projects.

AmInvestment Research said on Wednesday that the firm’s foreign debt accounts for 40 percent of the gross debt of RM1.7 billion as of December last year. Of the debt, RM496 million is expected to be repaid this year, The Star reports.

That is the reason, “the group is earmarking $80 million to $130 million for engineering, procurement and construction projects in Laos, Tanzania and Uzbekistan, as well as working capital for Middle Eastern operations and maintenance contracts.

“While the group has already issued a RM800 milllion sukuk programme in October last year and retained the outstanding proceeds of RM419 million from its RM407 million IPO in February 2017 and RM427 million private placement in January 2018, this new foreign-denominated debt issue circumvents the conversion of the ringgit, which requires Bank Negara approval.”

According to AmInvestment Research,  the firm’s management is expecting ‘strong revenue growth’ this year, factoring in the growing demand in the Middle East and Southeast Asia. That said, the growth will be supported by  Serba Dinamik’s operation and maintenance services. The services nearly account for 89% of the firm’s financial year 2018 revenue.

AmInvestment Research is also optimistic about Serba Dinamik’s ‘O&M business model’. The model is expanding its ‘long-term recurring earnings’ by capitalising on its engineering, procurement, and construction along with its asset ownership platform.

Leave a Comment

* By using this form you agree with the storage and handling of your data by this website.