KUALA LUMPUR: OCK Group Bhd, which has launched its RM150mil Islamic bond programme, is targeting to raise RM5mil initially to activate the sukuk programme while utilising the rest of the proceeds for its needs over the next two to three years.
Managing director Sam Ooi said after the sukuk launch yesterday that the local telecommunications network services company was in a better position to build more towers when required by its clients with the availability of another fund-raising option.
“Proceeds from the sukuk programme would be utilised to expand our tower assets. Currently, we own 60 telecommunication towers and we hope to grow the number to improve on our recurring income,” he said, adding that the sukuk issuance had helped it raise its capacity and capability to bid for bigger projects.
He said the company was in talks with interested parties to subscribe to its sukuk programme, which had a tenure of up to 20 years, but declined to elaborate further.
Commenting on the amount to be raised, BNP Paribas Malaysia Bhd managing director Tan Chong Hin said: “The issuer (OCK) has set an aggressive target for us as a joint lead manager, so we hope to be able to get back to them as soon as we can.”
On the method used, Bank Muamalat (M) Bhd chief executive officer Datuk Mohd Redza Shah Abdul Wahid said the sukuk programme provided flexibility for the issuer to raise funds at a more attractive costing compared to conventional bonds.
PNB Paribas is the principal adviser, lead arranger, syariah adviser and joint lead manager for the programme alongside Bank Muamalat, which is the joint lead manager.
As for the number of towers it plans to build, Ooi said it was subject to the needs of its clients.
According to him, a three-legged tower costs between RM250,000 and RM300,000, while the cost to build a rooftop site is about RM60,000.
He said the demand for rooftop sites was 70% compared to 30% for towers.
It took five to six years to recover the return on investment of its tower-leasing business, he added.
He expects its network deployment work to continue to grow at a double-digit quantum due to the rise in activities as a result of the upgrading works to long-term evolution technology by telecom operators.
Concurrently, it would also grow its sources of recurring income, for instance via its renewable energy business and tower leasing business, by double digits, he said.
Going forward, he expects its overseas operations to contribute about 10% to 20% to its topline, following the incorporation of its Myanmar and Cambodian units next year. It plans to set up an entity in Thailand for its green energy business.
In the previous financial year, the domestic business activities contributed to almost all of its revenue.