RM1.06b sukuk redeemed by Ananda

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PETALING JAYA: Tycoon T. Ananda Krishnan – controlled Binariang GSM Sdn Bhd has partially redeemed RM1.06bil of its senior sukuk and prepaid US$6.87mil of its US dollar-denominated term loan, said a local ratings agency.

RAM Ratings in a statement said it was closely monitoring the progress of the group’s corporate restructuring exercise to decouple Aircel, and was in consultation with its advisors to determine and implement an optimal structure to satisfy the objective.

“The corporate exercise which was initially slated for completion by September 2012, is now targeted to be completed within the next few months once there is further clarity on the New Telecom Policy and other regulatory and policy changes in India that could impact the transaction,” it said.

It added the partial redemption had been prompted by the sale of Binariang’s indirect 5% stake in Maxis Bhd via its wholly-owned subsidiary Maxis Communications Bhd, which has a direct shareholding of 65% in Maxis Bhd.

The senior sukuk consists of a RM19bil Islamic medium-term notes programme and a RM2bil Islamic commercial papers programme, of which only RM7.2bil senior sukuk remains outstanding after the recent redemption. It also has a US$900mil cumulative non-convertible Islamic junior sukuk.

Binariang is an investment holding company with subsidiaries and affiliates that are involved in the Malaysian, Indian, and Indonesian cellular telecommunication markets, via Maxis,Aircel Ltd and PT Axis Telekom Indonesia respectively.

The move to restructure Aircel out of Binariang is due to the drag caused by Aircel on Binariang’s consolidated balance sheet. Aircel is 74% owned Binariang via its subsidiary, Maxis Communications.

RAM Ratings said in past reports that Binariang’s financial profile had been suffering in the past few years, much of the negative impact stemming from Aircel’s hefty investments to support network roll-out and third-generation and broadband wireless access spectrum acquisition costs in India.

“Furthermore, the investments are not expected to generate strong earnings in the near term and has weighed heavily on the group’s consolidated balance sheet and debt protection indicators,” it said.

Allegations surfaced in October about alleged criminal conspiracy over the Maxis-Aircel deal, involving Ananda, his executive Ralph Marshall, former Indian Telecoms Minister Dayanidhi Maran and his brother Kalanidhi. – The Star