CIMB Islamic signs largest-ever term facility with MNC

  • Business
  • Wednesday, 27 Oct 2010

KUALA LUMPUR: CIMB Islamic Bank Bhd yesterday formalised the largest-ever term financing facility to date with a multinational company when the bank, a unit of CIMB GROUP HOLDINGS BHD, signed a 12-year US$100mil facility based on the syariah concept of Bai’ Al ‘Innah with Hewlett-Packard (HP) Multimedia Sdn Bhd, a subsidiary of Hewlett-Packard Malaysia Sdn Bhd.

The bank was represented by CIMB Group chief executive Datuk Seri Nazir Razak, who signed on behalf of CIMB Islamic, while HP was represented by its enterprise services senior vice-president for Asia Pacific and Japan, Kevin Jones.

The Multimedia Development Corp (MDeC) chief executive officer Datuk Badlisham Ghazali witnessed the signing of the agreement.

The facility would be used to finance the first phase of HP’s 32-acre “next generation data centre” in Cyberjaya, which formed part of the company’s 28.3ha integrated campus.

Nazir said the facility, at US$100mil, was a significant boost for the local Islamic finance industry as well as to the country’s ambition’s of becoming a leading global Islamic financial centre.

“It is the largest facility ever by CIMB Islamic because this is a direct funding compared with sukuk fund-raising which is the usual route taken by foreign companies when taking up Islamic financing,” he said at a briefing following the signing ceremony between CIMB Islamic and HP.

Nazir said there was an option to extend the facility to finance subsequent phases but this would be discussed in due course.

He urged both domestic and foreign businesses as well as retail borrowers, when looking at their financing needs, to explore every funding option.

Nazir said there was a misperception that Islamic financing was more expensive and cumbersome to fund.

He said this was not true because the industry had grown to become a major presence in the world as businesses and individuals now found it to be economical for their financing needs especially since funding in the developed markets was more expensive.

Meanwhile, Jones said the investment in the data centre represented part of the US$1bil the company would be investing to transform the enterprise services business globally.

Upon completion in 2016, the HP campus would be one of four global network centres alongside others in India, Mexico and Costa Rica.

Badlisham said HP’s investment was part of several in the pipeline for Cyberjaya. “Last month we announced that we’ve RM2bil worth of commitments year-to-date,” he said.

Badlisham added that MDeC was eyeing more investments from the oil and gas, pharmaceutical, financial and animation industries as this formed part of the strategy of attracting investment which could help develop talent in the country.

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