11 CONVERTIBLE SUKUK – DEBT COMPONENT
Group
2014
2013
$’000
$’000
Carrying amount of debt component at beginning of the year
69,678
76,163
Profit accretion, including amortisation of transaction costs
697
679
Extinguishment of debt component arising from conversion
of Convertible Sukuk
–
(7,164)
Carrying amount of debt component at end of the year
70,375
69,678
On 24 September 2012, a wholly-owned subsidiary of the Trust, Sabana Treasury Pte. Ltd. (the “Issuer”),
issued a $80.0 million in aggregate principal amount of unsecured Convertible Sukuk due on 24 September
2017 of 4.50% per annum. The Convertible Sukuk are convertible by Sukukholders into Units of Sabana
REIT at any time on or after 9 November 2012 up to the close of business on the seventh day prior to
24 September 2017. As at 31 December 2014, the conversion price per Unit (“Conversion Price”) is
$1.1199 (2013: $1.1642). The Trust has the option to pay cash in lieu of issuing new Units on conversion
of any Convertible Sukuk.
The Convertible Sukuk, may be redeemed, in whole or in part, at the option of the Sukukholders on
24 September 2015 (the “Put Option Date”) at the principal amount outstanding together with any accrued
and unpaid profit to the Put Option Date.
The Convertible Sukuk may be redeemed, after 24 September 2015, at the option of the Issuer, in whole
but not in part, at 100% of the principal amount of the Convertible Sukuk outstanding, plus any accrued
but unpaid profit, if the closing price of the Units for any 20 consecutive trading days is at least 130% of
the Conversion Price in effect on such trading day.
The Convertible Sukuk may also be redeemed at any time prior to 24 September 2017, at the option of
the Issuer, in whole but not in part, at 100% of the principal amount of the Convertible Sukuk outstanding,
plus any accrued but unpaid profit, if at any time at least 90% of the principal amount of the Convertible
Sukuk originally issued have already been converted, redeemed or purchased and cancelled.
During the year ended 31 December 2013, Converting Sukukholders had exercised their options to
convert an aggregate principal amount of $7.5 million of the Convertible Sukuk. As a result the Trust
elected to issue 6,285,090 Units at the then conversion price of $1.1933 to the Converting Sukukholders.
As at 31 December 2014, the effective profit rate for the Convertible Sukuk – debt component is
approximately 5.65% (2013: 5.65%) per annum.
Year ended 31 December 2014
NOTES TO THE FINANCIAL STATEMENTS
SABANA REIT
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ANNUAL REPORT 2014
121
