Kumpulan Perangsang Selangor Bhd’s (KPS) unit has accepted an Islamic finance credit facility for up to RM150 million from RHB Islamic Bank Bhd to partially fund the acquisition of a subsidiary.

In a bourse filing, the group said that wholly-owned subsidiary Perangsang Dinamik Sdn Bhd (PDSB) today accepted RHB Islamic Bank's Commodity Murabahah Term Financing-I facility in order to finance up to 48.2% of the group’s acquisition of Toyoplas Manufacturing (Malaysia) Sdn Bhd (TMMSB) from Toyoplas Consolidated Ltd.

PDSB is paying RM311.25 million for the entire equity interest in TMMSB.

To guarantee the credit facility, PDSB is to enter a master facilities agreement with RHB Islamic Bank for the Commodity Murabahah facilities and enter a memorandum of charge over the shares of TMMSB.

In addition, to KPS is to provide an RM150 million corporate guarantee to RHB Islamic Bank for its subsidiary.

PDSB will also have to assign shares in TMMSB, associated dividends from TMMSB shares and other TMMSB related income to RHB Islamic Bank, while also having to open accounts in the bank.

While not having any impact on KPS’ shareholdings, the credit facility is expected to raise KPS’ gearing to 0.53 times, from 0.4 times currently.

KPS said its gearing ratio of 0.4 was due to the issuance of RM300 million in nominal value under its Sukuk Murabahah Programme and the settlement of borrowings worth RM294 million with proceeds from the Sukuk Murabahah Programme.

Moreover, KPS said it had to settle RM163.1 million worth of debts using proceeds from its divestment of Syarikat Penguluar Air Sungai Selangor Sdn Bhd (SPASS) through Syarikat Pengeluar Air Selangor Holdings Bhd (SPLASH).

SPLASH is a 30%-associate company of KPS’s wholly-owned subsidiary Viable Chip (M) Sdn Bhd.

“The Board, after having considered the Islamic Facilities, is of the opinion that it is in the best interest of Perangsang Selangor group,” said the group.

The counter closed 2.88% or three sen lower at RM1.01 — with 696,200 shares traded — giving it a market capitalisation of RM542.76 million.