Malaysian law firms Adnan Sundra & Low (ASL) and Zul Rafique & Partners have advised on the establishment of Kuala Lumpur-based Velesto Energy’s MYR1 billion (USD241 million) Sukuk Wakalah programmes.
Comprising Islamic commercial papers (ICP) and Islamic medium-term notes (IMTN), the programmes are designed to provide a flexible funding platform to support Velesto Energy’s financing and growth objectives.
Adnan Sundra & Low counselled Maybank Investment Bank, the principal adviser, lead arranger and lead manager on the Sukuk Wakalah programmes.
The team included banking and finance partners Deepak Sadasivan and Priya Sirisena, managing associate Pei Yin Lim, and associates Jacqueline Yong Yung and April Liang Yin Chaw.
“The most pertinent regulatory and compliance matters we advised on in this regard were the regulatory requirements in connection with the lodgement with the Securities Commission Malaysia under the Guidelines on Unlisted Capital Markets Products under the Lodge and Launch Framework, and the required terms of the programmes to take into account the flexibility to issue green, social and sustainability sukuk in accordance with the Asean Green Bond Standards, the Asean Social Bond Standards and the Asean Sustainability Bond Standards,” Sirisena told Asia Business Law Journal.
Sirisena said the transaction marked Velesto Energy’s debut in the debt capital markets.
“The transaction allowed us to draw on our experience to advise on current market practice and documentation requirements for programmes of this nature,” she said.
Zul Rafique served as solicitors to Sumber Ribu, a wholly owned subsidiary of Velesto Energy. The team was led by banking and finance practice group head Loh Mei Mei and partner Jayden Chuah, who were supported by associate Ke Ying Wong.
“Our role included advising on the legal and regulatory framework governing the programmes, reviewing and negotiating the transaction documents, and assisting with the implementation of the programme structure to ensure compliance with the relevant requirements of the Securities Commission Malaysia, the Lodge and Launch Framework, and other applicable regulatory requirements,” Chuah told ABLJ.
“We also worked closely with the principal adviser, shariah adviser and other transaction parties in relation to the establishment of the Sukuk Wakalah programmes and the incorporation of features that provide flexibility for future sustainability sukuk and sustainability-linked sukuk issuances.”
Chuah said the structure of the Sukuk Wakalah programmes was a key highlight of the transaction.
“The programmes were designed to provide the issuer with significant flexibility, including the ability to issue sustainability Sukuk Wakalah and/or sustainability-linked Sukuk Wakalah in the future, subject to compliance with the relevant sustainability frameworks and market requirements,” he said.
“Another notable feature was the inclusion of an upsizing mechanism, which allows the programmes to be expanded in the future should the issuer’s funding requirements evolve.”
He said the dual-programme structure also warranted close co-ordination among multiple stakeholders.
“From a transaction execution perspective, the establishment of a dual-programme structure comprising both an ICP programme and an IMTN programme required close co-ordination among the issuer, corporate guarantor, principal adviser, shariah adviser, trustee and other stakeholders to ensure that the commercial objectives of the parties were appropriately reflected while maintaining compliance with the applicable regulatory and shariah requirements,” he said.
Velesto Energy provides drilling services for the upstream sector of the oil and gas industry.
