Digi.Com plans to raise $1.12b through Islamic bonds
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Malaysia’s Digi.Com has secured approval to raise 5 billion ringgit ($1.12 billion) through via sukuk (Islamic bond) programs.
The company’s unit Digi Telecommunications will issue the bonds, and the proceeds will be used to finance the company’s capex, working capital and other funding requirements.
In a statement to the local stock exchange, Digi said the company plans to use the funds to invest in data and digital growth opportunities, as well as expanding its LTE-Advanced network, the digitization of the core business as well as investments in spectrum and other strategic assets.
The operator said the sukuk program will allow it to tap into opportunities in the debt capital market with a wider and more diverse base of investors.
Malaysian bond market credit rating service provider RAM Holdings has assigned the sukuk programs a AAA/Stable rating.
Digi.Com is 49% owned by Telenor Asia. The operator reported a net profit of 1.63 billion ringgit in 2016, down 5.2% from the previous year, and its total debt increased by 988 million ringgit to 2.3 billion ringgit, due largely to upfront spectrum costs.
Questions & Answers
Q.What is the primary purpose of Digi.Com raising funds through these Islamic bonds?
What is the primary purpose of Digi.Com raising funds through these Islamic bonds?
The company plans to use the proceeds to finance its capital expenditure, working capital, and other funding requirements. This includes investing in data and digital growth, expanding its LTE-Advanced network, and digitising the core business.
Q.What is the credit rating assigned to Digi.Com's sukuk programs?
What is the credit rating assigned to Digi.Com's sukuk programs?
Malaysian bond market credit rating service provider RAM Holdings has assigned a AAA/Stable rating to Digi.Com's sukuk programs. This indicates a very high level of creditworthiness for the Islamic bonds being issued.
Q.How did Digi.Com's financial performance look in the year prior to this announcement?
How did Digi.Com's financial performance look in the year prior to this announcement?
Digi.Com reported a net profit of 1.63 billion ringgit in 2016, which was down 5.2% from the previous year. Its total debt also increased by 988 million ringgit to 2.3 billion ringgit, mainly due to upfront spectrum costs.