Page 170 - S P Setia Annual Report 2016
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168   S P Setia Berhad Group
                Annual Report 2016

          Notes To The Financial Statements

          For The Financial Year Ended 31 December 2016

          21.   PERPETUAL BOND
              On 13 December 2013, the Company issued a total of RM609 million in nominal value of unrated subordinated Islamic Perpetual Notes
              (“Sukuk Musharakah”) via private placement on a best effort basis without prospectus pursuant to a Sukuk Musharakah Programme
              (“Perpetual bond”) of up to RM700 million in nominal value. The Perpetual bond is established to raise funds as and when required to
              be utilised for Shariah-compliant purposes which include the Company’s investments and working capital.

              The salient features of the Perpetual bond are as follows:
              (i)   The Perpetual bond is issued under the Islamic principle of Musharakah, while the principle of Commodity Musawamah will be
                   employed to effect the deferral of the periodic distributions, if any;

              (ii)   Perpetual in tenure, where the Company has a call option to redeem the Perpetual bond at the end of the fifth year and on each
                   periodic distribution date thereafter;

              (iii)   The Company also has the option to redeem the Perpetual bond if there is a change in accounting standards resulting in the
                   Perpetual bond no longer being classified as equity;

              (iv)   The expected periodic distribution up to year 5 is 5.95% per annum payable semi-annually. If the Company does not exercise its
                   option to redeem at the end of the 5th year, the periodic distribution increases by 1% per annum subject to a maximum rate of 20%;

              (v)   Deferred periodic distribution, if any, will be cumulative but will not earn additional profits (i.e. there will be no compounding);

              (vi)   Payment obligations on the Perpetual bond will at all times, rank ahead of other share capital instruments for the time being
                   outstanding, but junior to the claims of present and future creditor of the Company (other than obligations ranking pari passu
                   with the Perpetual bond); and
              (vii)  The Perpetual bond is not rated and is unsecured.


              The redeemable cumulative preference shares (“RCPS”) issued by subsidiaries of the Company (“the Subsidiaries”) are redeemable at
              any time at the discretion of the Subsidiaries after 3rd to 5th anniversary but before the 6th to 8th anniversary of the issue date, provided
              always that the redemption sum to be determined shall not be less than the nominal value of RM0.01 plus share premium of RM0.99
              and any amount of dividend payable on the redemption date (including the aggregate amount of any arrears or accruals of dividend,
              whether or not declared, at the time of redemption).

              The preference shares confer on their holders the following rights and privileges:

              (i)   The right to be paid, a cumulative preferential dividend of 4% to 7% per annum on the issue price, or at 500% per annum gross
                   based on its nominal value;

              (ii)   The right in a winding up or return of capital (other than on the redemption of the preference shares) to receive, in priority to the
                   holders of any other class of shares in the capital of the Subsidiaries, repayment in full of the nominal value plus share premium
                   of RM0.99 and the payment of any cumulative preferential dividend calculated up to the date of commencement of the winding
                   up or return of capital, but no further right to share in surplus assets; and

              (iii)   The right to receive notice of and attend all general meetings of the Subsidiaries, and shall have the right on a poll at any general
                   meeting of the Subsidiaries to one vote for each preference share held:

                   (a)   upon any resolution which varies or is deemed to vary the rights attached to the preference shares;

                   (b)   upon any resolution for the reduction of capital of the Subsidiaries; and

                   (c)   upon any resolution for the winding up of the Subsidiaries, but shall otherwise have no right to vote at general meetings of
                       the Subsidiaries.
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