Permodalan Kelantan's RM35mil Social Sukuk: What It Means

Quick Answer: Permodalan Kelantan Bhd (PKB) raised RM35 million through a social sukuk, Malaysia’s first issued by a state agency, to expand its Ar-Rahn pawnbroking business. Maybank Investment Bank was sole principal adviser and lead arranger, while Maybank Islamic was sole subscriber. For PKB’s parent, Perbadanan Kemajuan Iktisad Negeri Kelantan (PKINK), it adds a second tranche that brings the programme to its full RM300 million.

The Permodalan Kelantan social sukuk raised RM35 million, according to a joint statement by PKB and Maybank Investment Bank on Tuesday. It is Malaysia’s first social sukuk issued by a state agency.

What Did the Permodalan Kelantan Social Sukuk Raise?

Permodalan Kelantan social sukuk RM35 million — Permodalan Kelantan raised RM35 million through a social sukuk for its Ar-Rahn business.

PKB is a wholly owned subsidiary of PKINK. The issuance was undertaken under its RM300 million sukuk wakalah programme.

Maybank Investment Bank acted as sole principal adviser, lead arranger, lead manager, sustainability structuring adviser and facility agent. Maybank Islamic was the shariah adviser and sole subscriber.

Why Is PKB Expanding Its Ar-Rahn Business?

Proceeds will expand PKB’s Ar-Rahn pawnbroking operations, including higher financing capacity and new branches. PKB began its Ar-Rahn business in March 1992 and now runs 35 branches across Kelantan, Pahang, Selangor, Kuala Lumpur, Kedah, Perlis, Johor, Sabah and Sarawak.

PKB chairman Datuk Ahmad Yaakob said the sukuk “not only provides PKB with an important source of financing but also serves as a catalyst for the expansion of the Ar-Rahn business.”

How Does the RM35 Million Fit Into PKB’s Sukuk Programme?

PKB issued RM265 million in sukuk in November last year, its entry into the Islamic debt capital market. Together with the latest RM35 million, the two issuances total the RM300 million programme size.

The framework is aligned with the Securities Commission Malaysia’s Sustainable and Responsible Investment Sukuk Framework, Asean Social Bond Standards and the International Capital Market Association’s Social Bond Principles.

Which Numbers Matter for PKB Shareholders?

RM35 million: size of the latest social sukuk
RM265 million: previous sukuk issued in November last year
35 branches: current Ar-Rahn footprint
March 1992: Ar-Rahn start date

Maybank Investment Bank deputy chief executive officer Tengku Ariff Azhar Tengku Mohamed said the issuance would support financing access and business activities among underserved communities.

No Bursa stock code is attached to PKB in this announcement, so there is no listed share price to read against the deal. Investors may want to watch whether the new branches are reflected in later updates from PKB or PKINK.

Disclaimer: This article is for general information only and is not investment advice. Always do your own research before making any investment decision.

Key Takeaways

PKB raised RM35 million through a social sukuk, Malaysia’s first by a state agency.
Proceeds fund the Ar-Rahn expansion, including higher financing capacity and new branches.
With the RM265 million issued in November last year, the programme totals RM300 million.
Ar-Rahn has operated since March 1992 with 35 branches.

Frequently Asked Questions

How much did Permodalan Kelantan raise from its social sukuk?

Permodalan Kelantan Bhd raised RM35 million through the social sukuk. The issuance was undertaken under its RM300 million sukuk wakalah programme.

Who arranged Permodalan Kelantan’s social sukuk?

Maybank Investment Bank was sole principal adviser, lead arranger, lead manager, sustainability structuring adviser and facility agent. Maybank Islamic was the shariah adviser and sole subscriber.

What will Permodalan Kelantan use the sukuk proceeds for?

The proceeds will expand PKB’s Ar-Rahn pawnbroking operations, including increasing financing capacity and establishing new branches. PKB currently operates 35 branches across Kelantan, Pahang, Selangor, Kuala Lumpur and six other locations.

Is Permodalan Kelantan’s social sukuk Malaysia’s first of its kind?

Yes, it is Malaysia’s first social sukuk issued by a state agency, according to a joint statement by PKB and Maybank Investment Bank. The framework is aligned with the Securities Commission Malaysia’s Sustainable and Responsible Investment Sukuk Framework, Asean Social Bond Standards and the ICMA Social Bond Principles.

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Permodalan Kelantan’s RM35mil Social Sukuk: What It Means