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SYDNEY: Saudi Telecom Co (STC) has obtained a RM1.51bil (US$378.5mil) Islamic loan through its Malaysian subsidiary, according to a document from arranging banks.
Saudi Telecom, the Gulf's largest telecommunications operator by market value, will use the Islamic loan to refinance existing debt originally used to acquire a stake in Malaysian mobile-phone firm Maxis.
STC, through its subsidiary STC Malaysia Holdings, owns a 25% stake in Binariang GSM Holdings which in turn holds a controlling stake in Maxis, according to the company's financial statements.
STC Malaysia Holdings hired Bank of Tokyo-Mitsubishi UFJ (Malaysia), HSBC Amanah Malaysia and Standard Chartered Bank Saadiq to arrange the deal.
The syndicated financing uses a sharia-compliant structure known as commodity murabaha, where one party agrees to purchase merchandise from a counterparty which promises to buy it back at an agreed mark-up at a later date.
Bank of Tokyo-Mitsubishi UFJ (Malaysia) will act as the investment agent to manage the cash flows of the facility and to execute the commodity murabaha transactions.
Malaysia is one of the largest markets for Islamic finance, which follows religious principles such as bans on interest and monetary speculation. - Reuters
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