TDM undertakes debt rationalisation exercise

PETALING JAYA: TDM Bhd is undertaking a debt rationalisation exercise involving the full settlement of the outstanding Indonesian rupiah (IDR) notes held by its Indonesian subsidiary PT Rafi Kamajaya Abadi.
The group told Bursa Malaysia that under the debt rationalisation exercise, it will utilise a US$105 million (RM434.3 million) credit facility in the form of a foreign currency revolving credit-i (FCRC-i) commodity Murabahah to fully settle the outstanding IDR notes used for its plantation operations in Kalimantan, Indonesia.
Subsequently, TDM will redeem its investment in fixed income securities, of which the proceeds will be used to fully settle the principal portion of the US$105 million FCRC-i.
Upon completion of the exercise, the group’s total interest-bearing borrowings and gearing will reduce to RM476.6 million and 0.41 times from RM766.6 million and 0.68 times respectively as at 30 June 2018.
“This debt rationalisation exercise is a step in the right direction for us. In addition to improving our financial performance by way of savings in future finance costs, the redemption of our fixed income investment will also eliminate the fluctuations in gains and losses arising from currency movements,” said TDM chairman Raja Datuk Idris Raja Kamarudin.
TDM noted that the exercise will enable it to meet the Securities Commission’s criteria of being a Shariah-compliant counter on Bursa Malaysia.
Meanwhile, the group’s wholly owned subsidiary Kumpulan Ladang-Ladang Trengganu Sdn Bhd also accepted a RM48.9 million credit facility to part finance its replanting and plantation development expenditure at the group’s plantations in Terengganu.
“This will support the group’s long term production growth by focusing on replanting of old plantations with new, high yield planting materials.”
TDM's share price was unchanged at 24 sen on 1.18 million shares traded.