StanChart pushing for more Islamic asset-backed financing

 

STANDARD Chartered Bank Malaysia Bhd is pushing for more Islamic asset-backed financing in Malaysia as an alternative for clients to raise funds, especially in difficult markets.


Managing director, origination and client coverage, Nirukt Sapru, said the concept was to drive companies in getting the benefit of the asset value that they have on their balance sheet rather than purely looking at cash flow.


"We are trying to get our clients to increasingly look at asset-based finance as a way of helping them raise financing in difficult markets," Sapru said.

"We could be doing almost across any industry. I would say individual asset size should be in the range of US$25 million to US$30 million per asset," he told reporters after a signing ceremony on Islamic financing between the bank and Tanjung Kapal Services Sdn Bhd in Kuala Lumpur yesterday.


Tanjung Kapal Services, a wholly-owned subsidiary of Tanjung Offshore Bhd, signed a RM162 million bilateral 10-year Islamic finance lease facility for the construction and commissioning of four new anchor handling tug and supply vessels.


Sapru said various banks were looking at lending in the Malaysian market but pure asset-based financing was "quite new" and Standard Chartered was looking at tapping at the new opportunities.


"It (the facility) is based on a combination of cash flow and asset valuation so I would say, it is something different and something new. The potential will be across multiple sectors, right through from oil and gas to construction and contracting," he said.


Sapru said the bank was in the midst of undertaking more similar financing in the coming months.


"Strong pipeline to come in the next six months," he said. -- Bernama