SapuraKencana - Revised PTC 4 June 2012

SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum
Berhad) (SKPB)
Proposed Issuance of Up To RM700 million in Nominal Value Sukuk Mudharabah Pursuant to a
Sukuk Mudharabah Programme (Sukuk Mudharabah)
PRINCIPAL TERMS AND CONDITIONS OF THE SUKUK MUDHARABAH

(Information required under paragraph 4.01 of the Guidelines on the Offering of Islamic
Securities)
1.
BACKGROUND INFORMATION OF THE ISSUER
(i)
Name
: SapuraKencana Petroleum Berhad (formerly known as

Sapura-Kencana Petroleum Berhad) (SKPB or the
Issuer).
(ii)
Registered Address
: Lot 6.08, 6th Floor

Plaza First Nationwide
No. 161, Jalan Tun H.S. Lee
50000 Kuala Lumpur
Business Address
: Level 6, Menara SapuraKencana Petroleum

Solaris Dutamas, No. 1
Jalan Dutamas 1
50480 Kuala Lumpur
(iii)
Business Registration No.
: 950894-T
(iv)
Date/Place of Incorporation
: 30 June 2011 / Malaysia
(v)
Date of Listing (in the case

of a public listed company)
: 17 May 2012.
(vi)
Status
(vii)
Resident/non-resident
controlled company
: Resident controlled company.
Bumiputera / nonBumiputera controlled

company
: Bumiputera controlled company.
Principal Activities
: The Issuer is principally an investment holding company.

Berhad) (SKPB)
(viii) Board of Directors (as at 15 :
May 2012)
No.
Name
(i)
Dato Hamzah bin Bakar
431007-07-5289
(ii)
Dato Mokhzani bin

Mahathir
610117-02-5155
(iii)
Dato Seri Shahril bin

Shamsuddin
610322-03-5029
(iv)
Chong Hin Loon
480806-08-5097
(v)
Yeow Kheng Chew
520928-07-5157
(vi)
Shahriman bin Shamsuddin
690318-08-5755
(vii)
Tan Sri Nik Mohamed bin

Nik Yaacob
490612-03-5111
(viii)
Tan Sri Datuk Amar (Dr.)

Tommy bin Bugo @ Hamid
bin Bugo
450825-13-5005
(ix)
Tan Sri Ibrahim bin

Menudin
480517-12-5195
(x)
Tunku Dato Mahmood

Fawzy bin Tunku
Muhiyiddin
580819-71-5551
(xi)
Mohamed Rashdi bin

Mohamed Ghazalli
570314-10-5329
(xii)
Mohd Adzahar bin Abdul

Wahid
640423-10-7703
Malaysian NRIC No.

Berhad) (SKPB)
(ix)
Structure of shareholdings
and names of shareholders
or, in the case of a public
company, names of all
substantial shareholders
(as at 15 May 2012)
Substantial
shareholders
Sapura
Technology
Sdn Bhd
(STSB)
Sapura
Holdings Sdn
Bhd (SHSB)
No. of ordinary shares

Direct
Indirect
953,004,474
19.0
1,001,022,718
20.0
20.0
Brothers
Capital Sdn
Bhd
Dato Seri
Shahril bin
Shamsuddin
2
3
Equity
(%)
1,001,022,718
0.2
7,876,092
3
1,001,022,718
Shahriman bin
Shamsuddin
956,385
Khasera Baru
Sdn Bhd
(Khasera)
795,320,313
*
3
Dato Mokhzani
Bin Mahathir
9,494,121
Seadrill Limited
Employees
Provident Fund
Board
20.0
1,001,022,718
20.0
15.9
0.2
4
795,320,313
15.9
589,405,702
11.8
530,610,364
10.6
Deemed interest by virtue of its direct interest in STSB, Indera Permai Sdn Bhd (IPSB), Sapura Capital
Sdn Bhd (SCSB) and Sapura Resources Berhad (SRB) pursuant to Section 6A of the Companies Act,
1965 (the Act).
Deemed interest by virtue of its direct interest in SHSB pursuant to Section 6A of the Act.
Deemed interest by virtue of his direct and indirect interest in STSB, SHSB, IPSB, SCSB and SRB pursuant
to Section 6A of the Act.
Deemed interest by virtue of his direct interest in Khasera pursuant to Section 6A of the Act.
3

Berhad) (SKPB)
(x)
Authorised and paid-up

capital
: Authorised Share Capital as at 15 May 2012

RM10,000,000,000.00
comprising
10,000,000,000
ordinary shares of RM1.00 each.
Issued and Fully Paid-up Share Capital as at 15 May

2012
RM5,004,366,198 comprising 5,004,366,198 ordinary
shares of RM1.00 each.

Berhad) (SKPB)
2.
PRINCIPAL TERMS AND CONDITIONS OF THE SUKUK MUDHARABAH
(a)
Names of parties involved in the proposed transaction (where applicable)

(i)
Principal Adviser / : AmInvestment

Sole Lead Arranger
SLA).
(ii)
Arranger (s)
: Not applicable.
(iii)
Valuers
: Not applicable.
(iv)
Solicitors
: Messrs. Albar & Partners.
(v)
Financial Adviser
: Not applicable.
(vi)
Technical Adviser
: Not applicable.
(vii)
Guarantor
: Not applicable.
Bank
Berhad
(AmInvestment
or
(viii) Trustee
: AmanahRaya Trustee Berhad.
(ix)
Facility Agent
: AmInvestment.
(x)
Primary
Subscriber(s) and
Amount subscribed
(where applicable)
: If applicable, the Primary Subscribers will be identified

prior to the issuance.
(xi)
Underwriter(s) and
amount underwritten
: Not applicable.
(xii)
Syariah Adviser
: Dr. Mohd Daud Bakar.
(xiii) Central Depository
: Bank Negara Malaysia (BNM) or any other entity

designated by BNM.
(xiv) Paying Agent
: BNM or any other entity designated by BNM.
(xv)
: Messrs. KPMG.
Reporting
Accountant
(xvi) Others (please

specify)
: Security Agent
AmInvestment as security agent for the Sukukholders
(as defined below) in respect of the Assignment and
Charge of the Sukuk Designated Accounts (as defined
below) only.
Maybank
5
Investment
Bank
Berhad
(Company

Berhad) (SKPB)
No.15938-H) as the Shared Security Agent for both the
Sukukholders (as defined below) and the syndicated
lenders of the Syndicated Term Loan Facility (as
defined below) in respect of the Shared Security (as
defined below).
The roles undertaken by SKPB in respect of the
Mudharabah transaction are as follows:
(i)
Issuer
As the Issuer of the Sukuk Mudharabah
(ii)
Mudarib
As the manager who will manage the Mudharabah
Venture (as defined below) and administer the
collection of income from the said Mudharabah
Venture.
(iii)
Obligor
As the Obligor, who undertakes to purchase the
Trust Assets (as defined below) from the Trustee
at the Exercise Price (as defined below).
(b)
Islamic Principle Used
: Mudharabah.
(c)
Facility Description
: The Islamic securities are based on the Shariah

principles of Mudharabah (Sukuk Mudharabah).
Under the Mudharabah transaction, the Issuer (as
Mudarib) shall enter into a Mudharabah contract with
the Trustee, acting on behalf of the investors (as
Rabbulmal).
Pursuant to the Mudharabah contract, the investors
(herein referred to as the Sukuk Mudharabah
holders) shall from time to time participate in the
Shariah compliant businesses of the Issuer and its
subsidiaries (Mudharabah Venture). The business
activities of the Issuer and its subsidiaries (collectively,
Group) are related to the oil and gas industry, which
include, amongst others, the business of providing
integrated services for the oil and gas industry with fullfledged Engineering, Procurement, Construction,
Installation and Commissioning (EPCIC) capabilities.
The Sukuk Mudharabah holders shall participate in the
Mudharabah Venture by subscribing to the Sukuk

Berhad) (SKPB)
Mudharabah which will be issued in series. Each
issuance represents a Mudharabah Venture on its own.
Proceeds from the Sukuk Mudharabah represent 100%
of the Sukuk Mudharabah holders capital contribution
(Mudharabah Capital) in the said Mudharabah
Venture. The Issuer on the other hand, as the Mudarib
shall have the absolute entrepreneurial authority to
manage the Mudharabah Venture and administer the
collection of income from the Mudharabah Venture.
The Issuer shall declare a trust over the rights and
entitlements under the Mudharabah Venture (Trust
Assets) for the benefit of the Sukuk Mudharabah
holders and itself. The Sukuk Mudharabah hence
represent each of the Sukuk Mudharabah holders
undivided proportionate beneficial interests in the
Mudharabah Venture.
Profits generated from the Mudharabah Venture will be
shared between the Rabbulmal and the Mudarib
according to a pre-agreed profit-sharing ratio (PSR) of
99:1 while losses will be borne solely by the Rabbulmal.
In respect of Sukuk Mudharabah with periodic
distributions, the payment of profits shall be based on
the income generated from the Mudharabah Venture
(the Periodic Distribution(s)) which shall be
distributed semi-annually (Periodic Distribution
Date) to the Sukuk Mudharabah holders. In respect of
Sukuk Mudharabah without Periodic Distributions, the
payment of profits shall be based on the income
generated from the Mudharabah Venture which shall be
distributed to the Sukuk Mudharabah holders on a oneoff basis (the One-off Distribution) on the respective
maturity dates of such Sukuk Mudharabah.
The Rabbulmals share of profits shall be the return
expected (Expected Return) by the Sukuk
Mudharabah holders from the Mudharabah Venture
which shall be the yield of the Sukuk Mudharabah for
the period from the issuance of the Sukuk Mudharabah
up to the respective maturity dates or the date of
declaration of an event which dissolves the Mudharabah
Venture (Dissolution Event), as the case may be.
Under the Mudharabah Venture, the Sukuk
Mudharabah holders have agreed upfront that they shall
receive profits up to the Expected Return. Any amounts

Berhad) (SKPB)
in excess of the Expected Return shall be given to the
Mudarib as an incentive fee for successfully managing
the Mudharabah Venture.
SKPB (as the Obligor) shall grant to the Trustee
(acting on behalf of the Sukuk Mudharabah holders) a
Purchase Undertaking whereby the Obligor shall
undertake to purchase the Trust Assets from the
Trustee at the Exercise Price (as defined in paragraph
(z) (i) below) upon the occurrence of the earlier of the
respective maturity dates of the Sukuk Mudharabah or
declaration of a Dissolution Event, subject to the terms
and conditions as set out in item (z)(i) herein.
Upon the exercise of the Purchase Undertaking and the
payment of the Exercise Price, the Mudharabah Venture
and the trust over the Trust Assets shall be dissolved
and the Sukuk Mudharabah shall be cancelled.
Please refer to Appendix 1 for further details.
(d)
Issue Size (RM)
: From the date of the first issue under the Sukuk

Mudharabah Programme up to the date falling a day
prior to the 10th anniversary thereafter, the outstanding
nominal value of the Sukuk Mudharabah issued under
the Sukuk Mudharabah Programme at any point in time
shall not exceed RM700 million. Thereafter, the limit of
the Sukuk Mudharabah Programme limit shall be
reduced in accordance with the reduction schedule
below (Reduction Schedule), and the outstanding
nominal value of the Sukuk Mudharabah issued under
the Sukuk Mudharabah Programme at any point in time
shall not exceed the Revised Sukuk Mudharabah
Programme Limit (as defined below):
Anniversary from
the date of first
issue
Reduction in
limit
(RMmillion)
Revised Sukuk
Mudharabah
Programme Limit
(RMmillion)
10
100.0
600.0
11
100.0
500.0
12
100.0
400.0
13
100.0
300.0
14
100.0
200.0
15
200.0

Berhad) (SKPB)
TOTAL
700.0
(e)
Issue Price
: The Sukuk Mudharabah may be issued at a discount, at

par or at a premium to the nominal value and the Issue
Price shall be calculated in accordance with the
Operational Procedures for Securities Services as
amended or substituted from time to time (Securities
Services Procedures).
(f)
Tenor of the Facility / Issue
: Programme Tenor
Up to fifteen (15) years from the date of the first issue of
the Sukuk Mudharabah.
Issue Tenor
More than one (1) year and up to fifteen (15) years
provided that (i) the Sukuk Mudharabah shall mature on
or prior to the expiry of the Sukuk Mudharabah
Programme and (ii) the Sukuk Mudharabah when so
issued shall adhere to the reduction in limit of the Sukuk
Mudharabah Programme so envisaged.
(g)
Coupon/profit or equivalent : The expected Periodic Distribution rate shall be

rate (%) (please specify)
determined prior to issuance of the Sukuk Mudharabah.
Profit-Sharing Ratio (PSR)
The PSR between the Rabbulmal and the Mudarib shall
be at the pre-agreed ratio of 99:1.
(h)
Coupon/profit payment
frequency and basis
: The Periodic Distribution, if any, shall be payable on a

semi-annual basis with the first distribution to be made
six (6) months from the date of each issuance of the
Sukuk Mudharabah and the last Periodic Distribution is
payable on the respective maturity dates of the Sukuk
Mudharabah or the date of the declaration of a
Dissolution Event, as the case may be.
The Periodic Distribution shall be calculated on the
basis of the actual number of days elapsed and actual
number of days basis (Actual/Actual).
(i)
Yield-to-Maturity (%)
: The yield-to-maturity shall be the Expected Return to

the Sukuk Mudharabah holders up to the respective
maturity dates under the respective Mudharabah
Ventures and which shall be determined prior to
issuance and agreed between the Issuer and the
investors / Primary Subscriber(s).

Berhad) (SKPB)
(j)
Security/collateral (if any)
: The Obligors obligations under the Purchase

Undertaking shall be secured by the following in the
form and substance acceptable to the SLA:
Shared security:
(i)
First legal charge over the shares (including all

rights, titles, interests, benefits, entitlements and
dividends arising therefrom) held or to be held
directly or indirectly by SKPB in the following
companies:
(a) Kencana Petroleum Berhad (Kencana);
(b) SapuraCrest Petroleum Berhad
(SapuraCrest);
(c) Kencana HL Sdn Bhd;
(d) Allied Marine & Equipment Sdn Bhd;
(e) Kencana Energy Sdn Bhd;
(f)
Kencana Petroleum Ventures Sdn Bhd;
(g) Kencana Torsco Sdn Bhd;

(h) Kencana Pinewell Sdn Bhd;
(i)
Kencana Bestwide Sdn Bhd;
(j)
TL Offshore Sdn Bhd;
(k) Sapura Energy Ventures Sdn Bhd;

(l)
Sapura Energy Sdn Bhd;
(m) Probadi Sdn Bhd;

(n) Nautical Essence Sdn Bhd;
(o) Sapura Petroleum Sdn Bhd (formerly known
as Energy Way Sdn Bhd);
(p) Petcon (Malaysia) Sdn Bhd; and
(q) Momentum Energy Sdn Bhd;
(ii) Assignment and charge over the following
designated accounts (Designated Accounts)
established or to be established by:
(a) SKPB:
(1) A revenue account;
(2) An operating account;
10

Berhad) (SKPB)
(b) Kencana:
(1) A revenue account;
(c) SapuraCrest:
(1) A revenue account
(iii) Assignment by SKPB, Kencana and SapuraCrest
of all income (less any income over which security
interest was created to secure the financiers under
the respective facilities of Kencana and
SapuraCrest existing prior to the execution of this
assignment) received from its subsidiaries,
associated companies and investees; and
(iv) Such other additional security if any, created or to
be created to secure both the Syndicated Term
Loan Facility and the Sukuk Mudharabah
Programme;
(collectively referred to as Shared Security);
Non-shared security:
(i)
Assignment and charge over a Shariah-compliant

disbursement account (Sukuk Disbursement
Account); and
(ii) Assignment and charge over a Shariah-compliant

finance service reserve account (Sukuk FSRA);
(collectively referred
Accounts).
to
as
Sukuk
Designated
The Shared Security shall also secure the interest of the

syndicated lenders (STL Lenders) granting the
Syndicated Term Loan Facility to be shared pari passu
in point of priority and security, subject to a security
sharing agreement to be entered into between amongst
others the Issuer, the Trustee, the Shared Security
Agent and the STL Lenders.
If during the tenure of the Sukuk Mudharabah
Programme, the security interests securing the interest
of the STL Lenders are released and discharged and
such security interests are not created to secure any
other new indebtedness, the Shared Security and the
assignment and charge over the Sukuk Designated
Accounts shall similarly be released and discharged
11

Berhad) (SKPB)
from securing the interest of the Sukukholders.
(k)
Details on Utilisation of
Proceeds
: The proceeds of the Sukuk Mudharabah shall be

utilised to fund the Groups Shariah-compliant working
capital,
Shariah-compliant
capital
expenditure
requirements, and Shariah-compliant investment and
business expansion in the oil and gas industry or related
industries, to refinance other existing financing facilities
of the Group, and for payments of fees, expenses, costs
and all other amounts payable in relation to the
issuance of the Sukuk Mudharabah.
(l)
Sinking Fund (if any)
: Not applicable.
(m) Rating
(n)
Credit Rating Assigned
: Rating of AA3.
Name of Rating Agency
: RAM Rating Services Berhad.
Form and Denomination
: The Sukuk Mudharabah shall be issued in accordance

with the Securities Services Procedures and/or any
other procedures/guidelines issued by the relevant
authority(ies).
The Sukuk Mudharabah, or if applicable, each series
thereof shall be represented by a global certificate in
bearer form to be deposited with the Central Depository,
and is exchangeable for definitive bearer form only in
certain limited circumstances. The denomination of the
Sukuk Mudharabah shall be RM1 million (unless
required to be in such other denominations in
accordance with the Securities Services Procedures
and/or any other relevant guidelines) and the Sukuk
Mudharabah shall be issued in multiples of RM5 million
at the time of issuance.
(o)
Mode of Issue
: The Sukuk Mudharabah may be issued via private

placement, bookbuilding on best effort basis or bought
deal.
(p)
Selling Restriction
: The Sukuk Mudharabah may not be offered, sold or

delivered, directly or indirectly, nor may any document
or other material in connection therewith be distributed
in Malaysia, other than to persons falling within:
(i)
at the point of issuance of the Sukuk Mudharabah,

Schedule 6 or Section 229(1)(b), Schedule 7 or
12

Berhad) (SKPB)
Section 230(1)(b) and Schedule 9 or Section
257(3) of the Capital Markets and Services Act
2007 as amended from time to time (CMSA);
(ii)
after the issuance of the Sukuk Mudharabah,

Schedule 6 or Section 229(1)(b) and Schedule 9
or Section 257(3) of the CMSA.
(q)
Listing status
: The Sukuk Mudharabah may be listed under the

Exempt Regime of the Main Market of Bursa Malaysia
Securities Berhad (Bursa Securities) or any other
stock exchange. Such listing on any other stock
exchange shall be for profiling purpose only and the
Sukuk Mudharabah shall not be traded on such stock
exchange.
(r)
Minimum level of
subscription (RM or %)
: The minimum level of subscription for each issue of the

Sukuk Mudharabah under the Sukuk Mudharabah
Programme shall be five percent (5%) of the nominal
value of each issuance, except for bought deal, where
the level of subscription for each issue shall be one
hundred percent (100%).
(s)
Other regulatory approvals

required in relation to the
issue, offer or
invitation and whether or
not obtained
: Not applicable.
(t)
Identified assets
: Not applicable.
Trust Assets
The Trust Assets shall comprise of the rights and
entitlements under the Mudharabah Venture.
(u)
Purchase and selling

price/rental (where
applicable)
: Not applicable.
(v)
Conditions precedent
: To include but not limited to the following (all have to be

in form and substance acceptable to the SLA):
(i)
The transaction documents have been executed

and, where applicable, stamped and presented for
registration.
(ii)
Receipt of certified true copies of the Certificate of
13

Berhad) (SKPB)
Incorporation, and the Memorandum and Articles of
Association, of the Issuer.
(iii)
Receipt of certified true copies of the latest Forms

24 and 49 of the Issuer.
(iv)
Receipt of a certified true copy each of board

resolutions of the Issuer authorising, among others,
the execution of the transaction documents and the
issuance of the Sukuk Mudharabah.
(v)
Receipt of a list of the Issuers authorised

signatories and their respective specimen
signatures.
(vi)
Receipt of documentary evidence that consents

from existing financiers, chargees, bank
guarantors or assignors (where applicable) have
been obtained for the Issuer to issue the Sukuk
Mudharabah.
(vii)
Receipt of a company search report of the Issuer.
(viii) Receipt of a winding up search report or the
relevant statutory declaration of the Issuer.

(ix)
The approval(s) from the Securities Commission

(SC) and where applicable, all other regulatory
authorities for the issuance of the Sukuk
Mudharabah have been obtained.
(x)
The endorsements from the Shariah Adviser in

respect of the Sukuk Mudharabah and the
transaction documents.
(xi)
The Sukuk Mudharabah have been assigned an

initial rating of at least AA3.
(xii)
For any subsequent issuance which would result

in the aggregate outstanding nominal value of the
Sukuk Mudharabah to exceed RM550 million, the
SLA has received written confirmation from the
rating agency that the rating of the Sukuk
Mudharabah will not be adversely affected by
such issuance.
(xiii) Evidence that all transaction fees, costs and
expenses have been paid in full.

14

Berhad) (SKPB)
(xiv) The SLA has received from the Solicitors a
favourable legal opinion addressed to the SLA

advising with respect to, the legality, validity and
enforceability of the transaction documents and a
confirmation addressed to the SLA that all the
conditions precedent have been fulfilled.
(xv)
(w) Representations and

warranties
Such other conditions precedent as advised by

the Solicitors and/or the Shariah Adviser.
: To include but not limited to the following:

(i)
the Issuer is a company with limited liability duly

incorporated and validly existing under the laws of
Malaysia, has the full power and authority to enter
into the business in which it is engaged or
proposes to engage and to own its properties and
assets and has legal and beneficial ownership of
all its properties and assets;
(ii)
the memorandum and articles of association of

the Issuer incorporate provisions which give
power, capacity and all necessary corporate
authorities have been obtained and action taken
for the Issuer to exercise its rights under and
perform its obligations under the transaction
documents to which it is a party;
(iii)
all necessary actions, authorisations and consents

required under the transaction documents (to
which the Issuer is a party) have been taken,
fulfilled and obtained (as the case may be) and
remain in full force and effect;
(iv)
the Issuers entry into, exercise of its rights under

and performance of the transaction documents to
which it is a party do not and will not violate any
existing law or documents/agreements to which it
is a party;
(v)
the transaction documents (to which the Issuer is

a party) are or, when executed, will be in full force
and effect and constitute (and will constitute)
legal, valid, binding and enforceable obligations of
the Issuer;
(vi)
no event that would constitute a contravention of
15

Berhad) (SKPB)
or default under the transaction documents (to
which the Issuer is a party) has occurred and is
continuing;
(vii) the Issuers consolidated audited financial
statements are prepared in accordance with
generally accepted accounting principles and
standards in Malaysia and give a true and fair
view of the results of the Issuers operations for
the period to which the financial statements are
made up; and
(viii) such other representations and warranties as may
be advised by the Solicitors and/or the Shariah
Adviser.
(x)
Events of default /
Dissolution events
: Dissolution Events shall include those standard for a

facility of this nature including but not limited to:
(i)
failure to pay any amount due from the Issuer/the

Obligor under any of the transaction documents
on the due date or, if so payable, on demand;
(ii)
the Issuer breaches any of its obligations or

terms and conditions under any of the transaction
documents to which it is a party (other than (i)
above) which has a material adverse effect and,
if such breach in the reasonable opinion of the
Trustee is capable of being remedied, the Issuer
does not remedy the breach within a period of
thirty (30) days after the Issuer became aware or
having been notified by the Trustee of the
breach, whichever is earlier;
(iii)
breach by the Issuer of any obligation under any

of the Issuers existing contractual obligations
which may materially and adversely affect the
Issuers ability to perform or comply with its
obligations under the transaction documents and,
if in the reasonable opinion of the Trustee is
capable of being remedied, the Issuer does not
remedy the breach within a period of thirty (30)
days after the Issuer became aware or having
been notified by the Trustee of the breach,
whichever is earlier;
(iv)
any representation, warranty or statement which

is made by the Issuer in the transaction
16

Berhad) (SKPB)
documents is or proves to be incorrect or
misleading in any material respect, which will in
the reasonable opinion of the Trustee have a
material adverse effect;
(v)
any provision of the transaction documents is or

becomes, for any reason, invalid, illegal, void or
unenforceable which would prevent the Issuer
from or entitle the Issuer to refrain from
performing any of its obligations thereunder;
(vi)
revocation, withholding or modification of any

license, authorisation, approval or consent which
in the reasonable opinion of the Trustee may
materially and adversely impair or prejudice the
ability of the Issuer to perform or comply with the
obligations under the transaction documents;
(vii)
the Group ceases to carry on all or a substantial

part of its business operations as at the date of
the Trust Deed;
(viii)
an encumbrancer takes possession of, or a

trustee, liquidator, receiver or similar officer is
appointed in respect of, all or a substantial part of
the business, assets or undertaking of the Issuer
and is not paid out, withdrawn or discharged
within thirty (30) days of such appointment, and
which will have a material adverse effect;
(ix)
the Issuer is unable to pay its debts within

Section 218(2) of the Companies Act, 1965 and
has not contested such claims by taking proper
legal steps;
(x)
the Issuer makes a general assignment or enters

into an arrangement or composition with or for
the benefit of its creditors in respect of all or a
material part of (or a particular type of) its
indebtedness;
(xi)
a resolution being passed or an order of court is

made that the Issuer be wound up or similar
proceedings which are reasonably determined by
the Trustee to be analogous in effect being
instituted (other than for the purposes of an intra
Group reorganisation on a solvent basis or an
17

Berhad) (SKPB)
amalgamation, merger or reconstruction the
terms whereof have previously been approved by
the Trustee unless during or following such
amalgamation, merger or reconstruction the
Issuer becomes or is declared to be insolvent) or
a bona fide petition (which for the avoidance of
doubt, excludes frivolous or vexatious petition) is
presented for the winding-up or dissolution of the
Issuer by an order of a court of competent
jurisdiction unless such petition is stayed,
withdrawn or dismissed within thirty (30) days (or
such extended period as the Trustee may
consent, such consent not to be unreasonably
withheld or delayed) of its presentation;
(xii)
the Issuer fails to satisfy any judgment which has

a material adverse effect passed against it by
any court of competent jurisdiction and no appeal
against such judgment has been made to the
appropriate appellate court within the time
prescribed by law or such appeal has been
dismissed;
(xiii)
any indebtedness of any member of the Group

for monies borrowed becomes due or payable or
capable of being declared due or payable prior to
its stated maturity by reason of a default by any
member of the Group in its obligations in respect
of the same, or any member of the Group fails to
make any payment in respect thereof on the due
date for such payment or if due on demand when
demanded or the security for any such
indebtedness becomes legally enforceable or
any guarantee or similar obligations of any
member of the Group for any such indebtedness
is not discharged at maturity or when called and
has not been contested by taking proper legal
steps;
(xiv) all or a material part of the property or assets of

the Issuer shall be condemned, seized or
otherwise
appropriated,
nationalised
or
compulsorily acquired by any person acting
under the authority of the governmental body,
which will in the reasonable opinion of the
Trustee have a material adverse effect;
18

Berhad) (SKPB)
(xv)
the Issuer repudiates any of the transaction

documents or the Issuer does or causes to be
done any act or thing evidencing an intention to
repudiate any of the transaction documents;
(xvi) at any time any of the provisions of the

transaction documents is or becomes illegal,
void, voidable or unenforceable;
(xvii) any event or events has or have occurred or a
situation exists which in the opinion of the
Trustee may have a material adverse effect on
the Issuer, and in the case of the occurrence of
such event or situation which in the reasonable
opinion of the Trustee is capable of being
remedied, the Issuer does not remedy it within a
period of thirty (30) days after the Issuer became
aware or having been notified by the Trustee of
the event or situation, whichever is earlier; and
(xviii) any other events as may be advised by the
Solicitors and to be mutually agreed between the
Issuer and the SLA.
Upon the occurrence of any of the events above, the
Trustee may and shall, if directed to do so by the Sukuk
Mudharabah holders, declare that such Dissolution
Event has occurred whereupon the respective Exercise
Prices under the Purchase Undertakings shall become
immediately due and payable and the Trustee shall
subject to the security sharing agreement be entitled to
enforce any other provisions of the transaction
documents.
(y)
Principal terms and

conditions for warrants
(where applicable)
: Not applicable.
(z)
Other principal terms and

conditions for the issue
19

Berhad) (SKPB)
(i)
Purchase
Undertaking
: In respect of each series of the Sukuk Mudharabah, the

Obligor shall grant an undertaking to the Trustee (acting
on behalf of the Sukuk Mudharabah holders) pursuant
to which the Obligor shall purchase the Trust Assets
from the Trustee at the Exercise Price upon the
occurrence of the earlier of any of the following events:
(i)
the maturity dates of such series of the Sukuk

Mudharabah; or
(ii)
the declaration of a Dissolution Event of such

series of the Sukuk Mudharabah.
The Exercise Price shall be determined based on the

following formula:
On the maturity dates of such series of the Sukuk
Mudharabah:
In respect of Sukuk Mudharabah with Periodic
Distributions, the Exercise Price shall be the
Mudharabah Capital plus Expected Return less total
Periodic Distributions paid.
In respect of Sukuk Mudharabah without Periodic
Distribution, the Exercise Price shall be the Mudharabah
Capital plus Expected Return less One-off Distribution
paid.
On declaration of a Dissolution Event of such series of
the Sukuk Mudharabah:
In respect of Sukuk Mudharabah with Periodic
Distributions, the Exercise Price shall be the
Mudharabah Capital plus Expected Return less
aggregate of Periodic Distribution(s) made and received
and to be adjusted to be equivalent to the accreted
value plus accrued but unpaid Periodic Distribution(s) (if
any) up to the date of declaration of a Dissolution Event
and shall be in accordance with the Securities Services
Procedures.
In respect of Sukuk Mudharabah without Periodic
Distribution, the Exercise Price shall be the Mudharabah
Capital plus Expected Return less One-off Distribution
made and received and to be adjusted to be equivalent
to the accreted value up to the date of declaration of a
Dissolution Event and shall be in accordance with the
Securities Services Procedures.
20

Berhad) (SKPB)
(ii)
Compensation for
Late & Default
Payments (Tawidh)
(iii) Financial Covenant
: In the event of overdue payments of any amounts due

under the Purchase Undertaking, the Obligor shall pay
to the Trustee for the benefit of the Sukuk Mudharabah
holders Tawidh on such overdue amounts at the rate
and manner prescribed by the Shariah Advisory Council
of the SC from time to time in accordance with the
Shariah principles.
Debt to Equity Ratio (D:E Ratio)
The Issuer shall maintain a D:E Ratio not exceeding
2.5:1 times throughout the tenor of the Sukuk
Mudharabah Programme.
(iv) Positive Covenants

(i)
the Issuer shall comply in all material respects

with all applicable laws, regulations and
guidelines;
(ii)
the Issuer shall perform all its obligations under

and comply with the provisions of the transaction
documents to which it is a party and the terms
and conditions of the Sukuk Mudharabah;
(iii)
the Issuer shall maintain its corporate legal

existence;
(iv)
the Issuer shall obtain, preserve, keep in force

and effect and promptly renew from time to time
all licenses, rights, authorisations, approvals,
consents
and
exemptions,
registrations,
recordings, filings or notarisations which are
required under the applicable law or regulation
including those necessary for the Issuer to own
its assets, to carry out the businesses of the
Issuer or to ensure the validity, enforceability or
priority of its liabilities and obligations or the
rights of the Trustee, the Sukuk Mudharabah
holders or any other party under the transaction
documents and shall comply with the terms and
conditions of the same;
(v)
the Issuer shall keep and maintain proper books

and accounts at all times in accordance with
approved accounting standards in Malaysia and
those financial statements (including income
21

Berhad) (SKPB)
statement and balance sheet) shall give a true
and fair view of the results of the operations of
the Issuer and to provide the Trustee and any
person appointed by it (e.g. auditors) access to
such books and accounts to the extent permitted
by law and upon written notice from the Trustee
requesting the same provided always that the
Trustee undertakes to keep such information to
which it has access on a confidential basis;
(vi)
the Issuer shall promptly notify the Trustee on

any litigation or other proceedings of any nature
whatsoever being threatened or initiated against
the Issuer before any court or tribunal or
administrative agency which may have a material
adverse effect;
(vii)
the Issuer shall preserve and maintain good and

valid title to its properties and assets;
(viii)
the Issuer shall pay and discharge all taxes

imposed upon it or its assets within the time
period allowed without incurring penalties save to
the extent that (a) payment is being contested in
good faith, (b) adequate reserves are being
maintained for those taxes, or (c) payment can
be lawfully withheld;
(ix)
to the extent required by law, the Issuer shall pay

and discharge all indebtedness payable by it;
(x)
the Issuer shall deliver to the Trustee as soon as

they become available (and in any event within
one hundred and eighty (180) days of the end of
each financial year) its audited financial
statements, and within ninety (90) days of the
expiration of each half year period or immediately
upon the announcement of results, whichever is
earlier, its unaudited financial statements for that
period;
(xi)
the Issuer shall utilise the issue proceeds for the

purpose as represented herein;
(xii)
the Issuer shall deliver to the Trustee any

information which the Trustee may reasonably
require in order to discharge its duties and
22

Berhad) (SKPB)
obligations under the transaction documents
relating to the Issuers affairs to the extent
permitted by law;
(xiii)
the Issuer shall appoint from time to time such

auditor or firm of auditors duly licensed by its
respective governing bodies;
(xiv) the Issuer shall exercise reasonable diligence in

carrying out its business in a proper and efficient
manner which should ensure, amongst others,
that all necessary approvals or relevant licenses
are obtained and maintained;
(xv)
the Issuer shall ensure that the terms in any of

the transaction documents do not contain any
matter which is inconsistent with the provisions of
the information memorandum issued in relation
to the Sukuk Mudharabah;
(xvi) the Issuer shall maintain at all times a paying

agent or its equivalent, who is based in Malaysia;
(xvii) the Issuer shall procure that the paying agent
shall notify the Trustee in the event that the
paying agent does not receive payment from the
Issuer on the due dates as required under the
transaction documents and the terms and
conditions of the Sukuk Mudharabah;
(xviii) the Issuer shall forthwith notify the Trustee in the
event that the Issuer becomes aware of the
following:(a)
any change in withholding tax position or

taxing jurisdiction of the Issuer (where
applicable);
(b)
any change in the utilisation of proceeds of

the Sukuk Mudharabah; or
(c)
any other matter that may materially

prejudice the interests of the Sukuk
Mudharabah holders;
(xix) the Issuer shall deliver to the Trustee any other

accounts, reports, notices, statements or
23

Berhad) (SKPB)
circulars
thereof);
(xx)
issued
to
shareholders
(or
class
the Issuer shall deliver to the Trustee at least

annually a certificate that the Issuer has complied
with its obligations under the transaction
documents and the terms and conditions of the
Sukuk Mudharabah and that there did not exist or
had not existed, from the date the first Sukuk
Mudharabah were issued or date of the previous
certificate as the case may be, any Dissolution
Event, where applicable and if such is not the
case, to specify the same; and
(xxi) such other positive covenants as may be advised

by the Solicitors and/or the Shariah Adviser.
(v)
Negative Covenants

(i)
the Issuer will not reduce or alter or to reduce or

alter in any way whatsoever except increase, the
authorised or issued and paid-up capital other
than the reduction in the share capital of the
issuer arising out of share buy-back scheme
permitted under Section 67A of the Companies
Act, 1965;
(ii)
the Issuer will not dissolve its affairs or

consolidate with or merge with any other person
or into another entity or otherwise, which would
have a material adverse effect;
(iii)
the Issuer will not cancel, surrender, transfer,

assign, relinquish or otherwise dispose any of its
rights and interest under the transaction
documents (except as permitted or required
under the transaction documents);
(iv)
the Group will not change or cause or permit to

change the nature or scope of their respective
existing business or operations in the oil and gas
and oil and gas related businesses or suspension
of its existing business or operations, which
would have a material adverse effect;
(v)
the Issuer will not add to, delete, vary, amend or

substitute its memorandum and articles of
24

Berhad) (SKPB)
association in any manner that may adversely
affect the ability of the Issuer to perform any of its
obligations under any of the transaction
documents whatsoever or will be inconsistent
with the provisions of any of the transaction
documents unless such addition, deletion,
variation, amendment or substitution is required
in compliance with regulatory requirements;
(vi)
the Issuer will not cancel, surrender, abandon or

otherwise amend or permit to be cancelled,
surrendered, abandoned or otherwise amended,
any licences, grant, consents, approvals or
authorisations in any way which could have a
material adverse effect, unless imposed by any
applicable law or authorities;
(vii)
the Issuer will not enter into a transaction,

whether directly or indirectly with interested
persons (including a director, substantial
shareholder or persons connected with them)
unless:
(a)
such transaction shall be on terms that are

no less favourable to the Issuer than those
which could have been obtained in a
comparable transaction from persons who
are not interested persons; and
(b) with respect to transactions involving an

aggregate payment or value which would
require both the approval of the
shareholders of the such transactions shall
be in accordance with the Bursa Securities
Main Market Listing Requirements, the
Issuer obtains certification from an
independent adviser that the transaction is
carried out on fair and reasonable terms;
PROVIDED THAT the Issuer certifies to the
Trustee in writing that the transaction
complies with sub-paragraph (vii) (a) above,
that where applicable, the Issuer has
received the certification referred to in subparagraph (vii) (b) above and that the
transaction has been approved by the
majority of the board of directors or its
25

Berhad) (SKPB)
shareholders in a general meeting, as the
case may require;
(vi) Permitted
Investments
(vii) Status
(viii)
the Issuer will not sell, transfer, encumber, lease

or otherwise dispose of the whole or any part of
the Groups undertaking, business or assets
(including but not limited to the Issuers
shareholdings in its subsidiaries) if such sale
transfer encumbrance lease or disposal would
have a material adverse effect; and
(ix)
such other negative covenants as may be

advised by the Solicitors and/or the Shariah
Adviser.
: The Issuer is permitted to invest or cause to be invested

the credit balances of the Sukuk Designated Accounts
in the following Shariah-compliant investments:
(i)
Islamic certificates of deposit, Islamic time

deposits, Islamic overnight bank deposits, Islamic
money market securities or other Islamic
securities in Malaysia with a minimum local rating
of AA3 or P1 and above (or its equivalent) issued
by and accepted by Malaysian financial
institutions
authorised
under
applicable
legislation; and
(ii)
Islamic treasury bills, Islamic money market

instruments, and other Islamic instruments
issued under Shariah principles by BNM or the
Government of Malaysia.
: The Sukuk Mudharabah shall constitute trust obligations

of the Issuer in relation to and represent the Sukuk
Mudharabah holders undivided proportionate beneficial
interest in the relevant Mudharabah Venture, which
entitles the Sukuk Mudharabah holders to the benefits
of the Purchase Undertakings.
The Sukuk Mudharabah will constitute direct,
unconditional and secured obligations of the Issuer and
shall at all times rank pari passu, without discrimination,
preference or priority amongst themselves and at least
pari passu with all other present and future unsecured
and unsubordinated obligations of the Issuer, subject to
those preferred by law.
26

Berhad) (SKPB)
The Obligors obligations pursuant to the Purchase
Undertaking shall constitute direct, unconditional and
secured obligations of the Obligor and shall at all times
rank pari passu, without discrimination, preference or
priority amongst themselves and at least pari passu with
all other present and future unsecured and
unsubordinated obligations of the Obligor, subject to
those preferred by law.
(viii) Redemption
: In the absence of the occurrence of a Dissolution Event

or unless the Sukuk Mudharabah are purchased and
cancelled, the Sukuk Mudharabah shall be redeemed
by the Obligor at 100% of their nominal value on their
respective maturity dates.
(ix) Repurchase and

cancellation
: The Issuer or any of its subsidiaries may at any time

purchase the Sukuk Mudharabah at any price in the
open market or by private treaty but such Sukuk
Mudharabah repurchased by the Issuer or any of its
subsidiaries shall not be eligible for voting rights as
prescribed under the trust deed and shall be excluded
from the calculation of the outstanding Sukuk
Mudharabah in determining the outcome of such voting.
The Sukuk Mudharabah once repurchased by the
Issuer shall be cancelled and cannot be reissued.
(x)
: From the date of provision of a formal offer by the SLA

until the first issue date of the Sukuk Mudharabah and,
for subsequent issuance of the Sukuk Mudharabah,
prior to the respective issuance dates, the SLA retains
the right to amend, withdraw and/or terminate the offer if
there occurs any event or circumstance which, in the
reasonable opinion of the SLA, may materially and
adversely affect any of the international and domestic
money, capital or syndicated loan markets, the business
activities of the Issuer and/or any of its subsidiaries
and/or associated companies, and/or the social,
political, financial and/or economic situation in Malaysia.
Adverse Market
(xi) Clear Market
: For the first issuance of the Sukuk Mudharabah, from

the date of provision of a formal offer by the SLA to sixty
(60) days after the first issuance of the Sukuk
Mudharabah and for the subsequent issuance of the
Sukuk Mudharabah from sixty (60) days before the
relevant target issuance date to sixty (60) days after the
relevant actual issuance date, the Issuer shall ensure
that no other borrowings, debt instruments or securities
issued and/or guaranteed by the Issuer and/or any of its
subsidiaries are mandated, syndicated, drawn down or
27

Berhad) (SKPB)
issued which may, in the opinion of the SLA, have the
effect of prejudicing the successful completion of this
transaction and the tender and/or placement and/or
selling down of the Sukuk Mudharabah.
(xii) Taxation
: All payments by the Issuer shall be made without

withholding or deductions for or on account of any
present or future tax, duty or charge of whatsoever
nature imposed or levied by or on behalf of Malaysia, or
any other applicable jurisdictions, or any authority
thereof or therein having power to tax, unless such
withholding or deduction is required by law, in which
event the Issuer shall be required to make such
additional amount so that the payee would receive the
full amount which the payee would have received if no
such withholding or deductions are made.
(xiii) Governing Laws
: Laws of Malaysia.
(xiv) Jurisdiction
: The Issuer shall unconditionally and irrevocably submit

to the non-exclusive jurisdictions of the courts of
Malaysia.
(xv) Syndicated Term

Loan Facility
A syndicated term loan facility of up to the maximum

aggregate principal amount of RM2.05 billion granted by
a syndicate of lenders to SKPB pursuant to the terms
and upon the conditions contained in a facility
agreement dated 17 April 2012 and made by SKPB with
amongst others the syndicate of lenders named therein.
28

Berhad) (SKPB)
APPENDIX 1
SUKUK MUDHARABAH
HOLDERS (99%)
Issue Sukuk Mudharabah
(Rabbulmal)
Periodic
5b
Distribution(s) /
One-off Distribution
Periodic Distribution(s) /
SKPB (1%)
5a
(Issuer / Mudarib)
3a
Capital
Contribution
TRUSTEE
(on behalf of Sukuk

Mudharabah holders)
3b
Periodic
Distribution(s) /
4
Declare
Trust
Capital Contribution
Capital
Contribution
SKPB
6
Purchase
Undertaking
(Obligor)
Mudharabah
contract
Mudharabah Venture
Note:
Shariah -compliant
business activities of
the Group
Refers to Mudharabah contract

between Issuer & Trustee (on behalf
of the Sukuk Mudharabah holders)
The Issuer (as Mudarib) shall enter into a Mudharabah contract with the Trustee acting
on behalf of the investors (as Rabbulmal) to participate in the Shariah-compliant
businesses of the Issuer and its subsidiaries (Mudharabah Venture). The business
activities of the Issuer and its subsidiaries are related to the oil and gas industry, which
include amongst others the business of providing integrated services for the oil and gas
industry with full-fledged EPCIC capabilities.
2&3
The Issuer shall issue the Sukuk Mudharabah to investors (Sukuk Mudharabah
holders). Proceeds from the Sukuk Mudharabah represent 100% of the Sukuk
Mudharabah holders capital contribution in the said Mudharabah Venture.
The Issuer shall declare a trust over the rights and entitlements under the Mudharabah
Venture (Trust Assets) for the benefit of the Sukuk Mudharabah holders and itself. The
Sukuk Mudharabah hence represent each of the Sukuk Mudharabah holders undivided
proportionate beneficial interests in the Mudharabah Venture.
Profits generated from the Mudharabah Venture will be shared and distributed between
the Rabbulmal and the Mudarib according to a pre-agreed profit sharing ratio (PSR) of
99:1, while losses will be borne solely by the Rabbulmal. In respect of Sukuk Mudharabah
with periodic distributions, the payment of profits shall be distributed semi-annually to the
Sukuk Mudharabah holders (Periodic Distribution(s)). In respect of Sukuk Mudharabah
without Periodic Distribution(s), the payment of profits shall be distributed to the Sukuk
Mudharabah holders on a one-off basis (the One-off Distribution) on the respective
maturity dates of such Sukuk Mudharabah.
SKPB (as the Obligor), shall undertake to purchase the Trust Assets from the Trustee
(acting on behalf of the Sukuk Mudharabah holders) via a Purchase Undertaking upon
occurrence of the earlier of the respective maturity dates of the Sukuk Mudharabah or
declaration of a Dissolution Event.
29

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SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum

PRINCIPAL TERMS AND CONDITIONS OF THE SUKUK MUDHARABAH

BACKGROUND INFORMATION OF THE ISSUER

: SapuraKencana Petroleum Berhad (formerly known as

: Lot 6.08, 6th Floor

: Level 6, Menara SapuraKencana Petroleum

Business Registration No.

: 30 June 2011 / Malaysia

Date of Listing (in the case

: Resident controlled company.

Bumiputera / nonBumiputera controlled

: Bumiputera controlled company.

: The Issuer is principally an investment holding company.

SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum

Dato Hamzah bin Bakar

Dato Mokhzani bin

Dato Seri Shahril bin

Chong Hin Loon

Yeow Kheng Chew

Shahriman bin Shamsuddin

Tan Sri Nik Mohamed bin

Tan Sri Datuk Amar (Dr.)

Tan Sri Ibrahim bin

Tunku Dato Mahmood

Mohamed Rashdi bin

Mohd Adzahar bin Abdul

Malaysian NRIC No.

SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum

No. of ordinary shares

SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum

Authorised and paid-up

: Authorised Share Capital as at 15 May 2012

Issued and Fully Paid-up Share Capital as at 15 May

SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum

PRINCIPAL TERMS AND CONDITIONS OF THE SUKUK MUDHARABAH

Names of parties involved in the proposed transaction (where applicable)

Principal Adviser / : AmInvestment

: Messrs. Albar & Partners.

: AmanahRaya Trustee Berhad.

: If applicable, the Primary Subscribers will be identified

: Dr. Mohd Daud Bakar.

(xiii) Central Depository

: Bank Negara Malaysia (BNM) or any other entity

(xiv) Paying Agent

: BNM or any other entity designated by BNM.

(xvi) Others (please

SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum

Islamic Principle Used

: The Islamic securities are based on the Shariah

SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum

SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum

Issue Size (RM)

: From the date of the first issue under the Sukuk

SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum

: The Sukuk Mudharabah may be issued at a discount, at

Tenor of the Facility / Issue

Coupon/profit or equivalent : The expected Periodic Distribution rate shall be

: The Periodic Distribution, if any, shall be payable on a

: The yield-to-maturity shall be the Expected Return to

SAPURAKENCANA PETROLEUM BERHAD (formerly known as Sapura-Kencana Petroleum

Security/collateral (if any)

: The Obligors obligations under the Purchase

First legal charge over the shares (including all