Islamic Finance

World’s largest rubber glove company sets up 3 bln ringgit sukuk programme

Malaysia’s Top Glove, the world’s largest rubber glove company, has set up a 3 billion ringgit ($737.15  million) perpetual sukuk programme.

The company said in a filing with Bursa Malaysia on Thursday (Jan 23) the programme will be based on wakalah bi al-istithmar.

Top Glove said proceeds raised from sales of sukuk under the programme will be used to refinance existing debt, repay inter-company borrowings, and/or finance working capital requirements, investments, acquisition, capital expenditure and/or general corporate purposes.

The sukuk programme is given a preliminary rating of AA-IS by Malaysian agency MARC.

Top Glove manufactures around 26% of the world’s rubber gloves, according to MARC. 

The group currently has 687 production lines in 33 glove factories with a combined capacity of 70.5 billion pieces, from 51.9 billion pieces in FY2017, according to MARC.

“In FY2019, revenue grew by 13.8% y-o-y to 4.8 billion ringgit while operating profit fell by 8.5% y-o-y to 495.3 million ringgit partly due to an increase in latex price and time-lag in product repricing,” said the rating agency.

CIMB Investment Bank and Hong Leong Investment Bank are the Joint Principal Advisers and Joint Lead Arrangers for the Perpetual Sukuk Programme. CIMB Islamic Bank is the Shariah Adviser for the sukuk programme.

($1 = 4.0687 Malaysian ringgit)

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