KUALA LUMPUR: SP Setia Bhd, which is buying 1,674.83 acres in Penang for RM620.12mil, has issued Islamic medium-term notes (sukuk murabahah) of RM434mil to part finance the purchase.

In a filing with Bursa Malaysia, the property developer said its unit Setia Recreation Sdn Bhd issued the 10-year sukuk on Monday.

Public Investment Bank Bhd is the principal adviser and lead arranger for the sukuk murabahah programme.

Setia Recreation had on Nov 9 last year won a tender bid for 1,674.83 acres in Seberang Perai Utara, about 18km from Butterworth, which was planned for an eco-themed mixed development township with a potential gross development value of RM9.6bil (spanning over 15 to 20 years).

Setia Recreation had on Dec 22 inked into a sale and purchase agreement with CIMB Islamic Trustee Bhd (acting as trustee for Boustead Plantations Bhd)  ito acquire of the freehold land at RM620.12mil or RM8.50 per sq ft.

In the announcement on the signing, SP Setia said it aimed to launch the township development on the land in 2019/2020.

At that time, it expected the purchase consideration to be funded via the cash proceeds from a recent issuance of Islamic redeemable convertible preference shares (completed on Dec 6, 2016) and/or bank borrowings