Ananda Krishnan plans to raise $1.9B through Islamic bonds for Aircel’s holding firm

A private telecom company backed by Malaysian tycoon Ananda Krishnan is seeking to raise about 6 billion ringgit by issuing Islamic bonds or sukuk, a person familiar with the matter said on Wednesday.

Kuala Lumpur-based Binariang GSM Sdn Bhd, which controls Indian mobile phone operator Aircel Ltd and Malaysia's Maxis Bhd, plans to use the proceeds to lower the funding the costs of its business, the person added.

CIMB Investment Bank is the deal arranger, the person added. The source declined to be identified as the information was not public.

The planned deal comes after RAM Ratings downgraded Binariang's bonds by two notches with the senior paper moving to A2 from AA3 and the commercial paper to P2 from P1. Under the bond agreement, an A2 on the senior bonds is the minimum rating and anything lower triggers a mandatory deferral of payments on the junior bond, according to IFR.

Bloomberg has earlier on Wednesday reported that Ananda's private telecom company, Binariang, will decide whether to proceed with the issuance by year end, citing a person familiar with the matter.

Ananda is Malaysia's second-richest man with a net worth of $11.7 billion as of March, according to Forbes.

Officials at Binariang and CIMB were not available for comment.

RAM on July 26 said the downgrade was due to the continuing poor performance of Aircel as the competitive industry and regulatory uncertainties in India had eroded Aircel's financial profile.

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