RHB Islamic Bank said it has successfully structured and lead arranged a syndicated Islamic term financing facility of up to RM355 million ($99.7 million) for Press Metal Sarawak (PMS), a subsidiary of Press Metal Berhad (PMB).
PMS received approval from Sarawak State Development Authority for the development of a comprehensive aluminium smelting plant and related industries in end May 2007. A land measuring approximately 366 hectares or 905 acres in Mukah was acquired by PMS.
RHB Islamic Bank Berhad was appointed by PMS as lead arranger to raise funds for the design, construction, operation and maintenance of the smelting plant. The syndicated term facility brings on board financiers Kuwait Finance House (Malaysia), Asian Finance Bank, Al Rajhi Banking & Investment Corporation (Malaysia) and Bank Kerjasama Rakyat Malaysia.
The Shari’ah-based facility is offered to PMS under two Islamic principles, namely Istisna’a (manufacturing contract) and Ijarah (lease). Financiers will enter into an agreement with PMS by placing an order for the construction of the project at an agreed construction price. Subsequently, PMS will lease it from the financiers for an agreed period and at an agreed rental payment amount. During the construction period, advance rental shall be served to the Financiers.
The development site is located along Jalan Mukah – Balingian of Mukah Land District, about three kilometers to the east of Kg. Kuala Bedengan. Target completion and commencement of the smelting plant operation is in the second quarter of 2009 with production capacity of 50,000MT per year.
PMS’s smelting plant project is a part of a major heavy industrial manufacturing development in Sarawak and is supposedly in line with Malaysia’s industrial development policy to develop the industrial and manufacturing sectors in Sarawak.
RHB Islamic Bank, a wholly-owned subsidiary of RHB Bank, first opened its doors to customers on 16 March 2005.
It describes itself as the first full-fledged Islamic bank to mature from an Islamic banking window operation of a conventional bank. RHB Islamic Bank says it offers the full range of Shari’ah-based banking and financial products and services, available at not only more than 180 RHB Bank and RHB Islamic Bank branches nationwide but also through RHB PhoneBanking and Internet Banking facilities.
RHB Islamic Bank claims to offer consumer, corporate, commercial and electronic banking solutions which include savings and current accounts, financing facilities, collection, payment and trade Services as well as investment banking, capital market and treasury products.