KUALA LUMPUR, Nov 19 (Reuters) - Singapore-listed Golden Agri-Resources Ltd, the world’s second largest palm oil plantation company, has issued its first Islamic bond, or sukuk, in Malaysia worth 1.5 billion ringgit ($488 million).
“The company considers Malaysia the ideal location for the issue given the country’s well-established and advanced sukuk market, which is abundant with liquidity, coupled with its familiarity with the palm oil industry,” Golden Agri said in a statement to the Singapore stock exchange on Monday.
The Islamic medium-term notes, part of a 5 billion ringgit program established earlier this month, will have a tenor of five years and mature in Nov 2017. The notes were priced at 4.35 percent.
Golden Agri said proceeds would go towards general corporate purposes, while the issuance would boost financial flexibility by readying the company for future growth.
Golden Agri, which has yet to achieve its internal target for hectarage expansion this year, may use some of the funds raised to buy new land, a company director told Reuters on Nov. 9 (Full Story:nL3E8M83DW).
Shares in Golden Agri added 1.7 percent to S$0.61 as of 0124 GMT. ($1 = 3.0715 Malaysian ringgits) (Reporting By Al-Zaquan Amer Hamzah; Editing by Richard Pullin)