42 AL-SALĀM REIT MANAGEMENT DISCUSSION AND ANALYSIS CAPITAL MANAGEMENT ANNUAL REPORT 2023 SUKUK IJARAH On 24 August 2023, the Manager successfully refinanced the Sukuk Ijarah Issue 2 with the issuance of RM455,000,000 in nominal value of Sukuk Ijarah Issue 3 which bears profit rate of 5.09% to 6.25% (2022: 3.75% to 5.09%) per annum. TERM FINANCING-I As at the reporting date, Al-Salām REIT has sent a letter requesting an extension of the facility tenure to repay a borrowing of RM118,000,000 for an additional 2 years. As at the date of the financial statements, Al-Salām REIT plans to finalise this extension letter before the maturity date in March 2024. Considering the feasibility of extending the financing tenure, Al-Salām REIT is confident on it's materialisation. MOVING FORWARD Al-Salām REIT’s present gearing ratio of 48.6% position it as one of the highest geared REITs domestically. Despite this, the Manager intends to reduce the current debt levels to a more manageable degree in the next year to achieve optimal gearing. To reach this target level, the fund plans to explore cost-effective financing solutions and implement placements to obtain the most favourable capital structure for the future. Al-Salām REIT remains committed to exercising proper stewardship of capital and risk in its pursuit to delivering long-term and sustainable value to shareholders and all stakeholders. The Manager is actively working to strengthen the balance sheet and enhance strategic relationships with all parties involved.
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