KULLIYYAH OF ECONOMICS & MANAGEMENT SCIENCES

ISF 2203 : SECTION 2

ISLAMIC FINANCING MANAGEMENT

FINANCING PROPOSAL ON BAYU SARI MARINA PROJECT

BANK ISLAM MALAYSIA BERHAD

NAME MATRIC NO

Puteri Mariam bt Megat Shahriman 1512888

Ma Shi Ying 1525180

Kamsiah binti Ibrahim 1413200

Intan Zarina binti Makpuris 1513072

Norhasanah binti Shamsyddin 1514266

NAME OF INSTRUCTOR:
MADAM FADHILAH BINTI ABDULLAH ASUHAIMI

DATE OF SUBMISSION:
06 APRIL 2018
(FRIDAY)

BAYU SARI MARINA

(SUNWAY BERHAD)
 Business Financing Team l 6 April 2018

PREPARED BY:

TABLE OF CONTENT.

Section 1 : Executive Summary

Section 2 : Background Of The Company And Project

Sunway Berhad Overview……………………………………………………………………………………………………..

Sunway Berhad Group Information……………………………………………………………………………………....
Sunway Berhad Financial Position………………………………………………………………………………………...
Bayu Sari Marina Overview…………………………………………………………………………………………………..
Section 3 : Credit Evaluation

Section 4 : Proposed Financing Package

Section 5 : Strength And Weaknesses Of The Project

Strength………………………………………………………………………………………………………………………………...
Weaknesses…………………………………………………………………………………………………………………………...

Section 6 : Recommendation

References

Appendix
EXECUTIVE SUMMARY

The following is a financing proposal to identify the suitable financial structure of the new
tourism area development, namely, Bayu Sari Marina at Mersing and Tinggi Island, Johor. This project is
owned by Sunway Berhad. Sunway Berhad or Sunway Group is a Malaysian Conglomerate company that
was formed following a merger between Sunway City Berhad (SunCity) and Sunway Holdings Berhad on
23 August 2011. In this report, we are representing from the Head of Business Financing of Bank Islam
Malaysia Berhad (BIMB), has been assigned to evaluate the viability and propose the relevant financial
products for this project. This project involves different types of development which are resort, jetty,
hospital, commercial area, residential area and some modification of landscape.

Before the decision was made on which product should we use to finance the project, we have
been investigating the background and features of each of the project including the detail of the
development project and also the financial performance of the company. This proposal also helps to
identify the strength and weaknesses of the project. This is to ensure that the company can carry out
the project throughout the given period.

This proposal will first introduce to the overview in a brief information of the company and the
development projects that has been proposed to us. In this report, we include the company background,
current management team, latest financial position and a basic information of each of the projects.
While proposing financial facilities to the company, we analyzed different types of development by using
different types of credit evaluation in order to make the most suitable decision for the project. In the
last section of this proposal, we had offer some suggestions or recommendations from the Head of
Business Financing in Bank Islam Malaysia Berhad in order to finalize and approve this project.

Background of the Company and Project

 Figure 1.0: Sunway Berhad company’s logo

Sunway Berhad or Sunway Group, an investment holding company, engages in property,

construction, education, and healthcare businesses in Malaysia and internationally. It is a 15,000-strong
team operating in 50 locations worldwide, pulling together to improve the quality of life of our
communities through 12 business divisions – property, construction, retail, hospitality, leisure,
healthcare, education, commercial, trading and manufacturing, building materials, quarrying and Real
Estate Investment Trust (REIT). Its Property Development segment develops residential and commercial
properties. The company’s Property Investment segment is involved in the management, operation, and
letting of properties, operation of theme parks, rendering recreational club facilities, travel agent and
time sharing businesses, management and operation of hotels, and investment in real estate investment
fund.

Its Construction segment constructs building and civil works; and provides mechanical,
electrical, and piling works. The company’s Trading and Manufacturing segment engages in the
manufacture and trading of construction and industrial products, and building materials, and importing
and distribution of pharmaceutical products. Its Quarry segment is involved in quarrying, manufacturing,
and supplying premix, manufacturing ready-mixed concrete, and production of building stones. The
company’s Investment Holdings segment engages in the management and letting of properties,
provision of financial services to companies within the Group, as well as holding of investment in the
shares of subsidiaries, associates, and other investments. Its Others segment is involved in the
management and operation of a medical center; manufacture of vitrified clay pipes, concrete pipes,
interlocking pavers, pre-tensioned spun concrete piles, precast micro injection piles, reinforced concrete
piles, eurotiles, blocks, and concrete products; provision of secretarial and share registration services,
interior design and renovation, and management services; underwriting of insurance; and lease and hire
purchase financing. The company was founded in 1974 and is based in Subang Jaya, Malaysia. Sunway
Berhad is a subsidiary of Sungei Way Corporation Sdn. Bhd.
 Figure 2.0: Sunway Group’s Tower in Sunway City, Kuala Lumpur.
Sunway Group’s Corporate Information
Board of Directors
Executive Chairman, Non-Independent Executive
Director
Tan Sri Dato’ Seri Dr Jeffrey Cheah Fook Ling
Deputy Executive Chairman,
Non-Independent Executive Director
Tan Sri Datuk Seri Razman M Hashim
Remuneration Committee
Datuk Seri Yam Kong Choy (Chairman) Wong
Chin Mun
Lim Swe Guan
Tan Sri Dato’ Seri Dr Jeffrey Cheah Fook Ling
Tan Sri Dato’ Dr. Lin See Yan
(Appointed with effect from 27 February 2017)
 Employees’ Share Option Scheme Committee
President,
Non-Independent Executive Director Wong Chin Mun (Chairman)
Dato’ Chew Chee Kin Tan Sri Dato’ Seri Dr Jeffrey Cheah Fook Ling
Dato’ Chew Chee Kin
Non-Independent Executive Director Sarena Cheah Yean Tih
Sarena Cheah Yean Tih Foo Shiang Wyne

Senior Independent Non-Executive Director Company’s Secretaries

Wong Chin Mun
Tan Kim Aun (MAICSA 7002988)
Independent Non-Executive Directors Chin Lee Chin (MAICSA 7012347)
Lim Swe Guan
Datuk Seri Yam Kong Choy Registered Office
Tan Sri Dato’ Dr. Lin See Yan Level 16, Menara Sunway, Jalan Lagoon Timur
Bandar Sunway, 47500 Subang Jaya Selangor
Audit Committee Darul Ehsan, Malaysia Tel No : (603) 5639 8889
Fax No : (603) 5639 9507
Wong Chin Mun (Chairman)
Lim Swe Guan
Datuk Seri Yam Kong Choy
Tan Sri Dato’ Dr. Lin See Yan

Nomination Committee

Lim Swe Guan (Chairman)

Wong Chin Mun
Datuk Seri Yam Kong Choy
Tan Sri Dato’ Dr. Lin See Yan
(Appointed with effect from 27 February 2017)

Financial Position of Sunway Berhad

Quarterly Report on Consolidated Results for the Financial Period Ended 30 June 2017
Bayu Sari Marina Overview

Bayu Sari Marina is a big project that owned by Sunway Berhad. It is the combination of new
tourism development projects that involves 65 acres of land which located at two different places, 35
acres of mainland in Mersing and another 30 acres of the Tinggi Island. The project is expected to be
completed within 3 years, starting from July 2018.

Mersing was chosen as the mainland of the development project is because it has potential to
be developed and become one of the most popular places for people to visit. Mersing is a town in Johor,
Malaysia. It remains as a fishing village despite the developing city centre of Johor Bahru. It is the main
departure spot for many islands. One can access various islands from Mersing jetty such as the Rawa
Island, Dayang Island, Aur Island, Pemanggil Island and more. Sunway Berhad want to develop this
mainland with the greater infrastructure due to the strategic location of the mainland itself to be the
tourism place.

In this project, Sunway Berhad plans to upgrade the existing jetty (Tanjung Leman Jetty),
integrated specialist hospital: construction of hospital building, medical equipment, interior design and
also the landscape. Other than that, Sunway Berhad plans to develop a residential area – 30-unit double
storey Semi D and 2 blocks of 15-storey of condominium, commercial area - 1 block of 2-storey building
which consist of of 20 shoplots and also SME Halal Hub. Besides, RM30,000,000 is allocated for the
beautification of Tanjung Leman Beach for tourism purposes.

Figure 3.0: Proposed area of Mersing and Tinggi Island

Tinggi Island (Malayu: Pulau Tinggi) is a large sparsely inhabited island in Mersing District, Johor,
Malaysia. Currently, the land area in Tinggi Island is a small jungle. The interior of the island is mostly
covered with secondary lowland Dipterocarp rainforest. Therefore, site clearance needs to be done and
the process is expected to be completed in 2 months, with the total cost of RM850,000.00. After the site
is cleared, then only the proposed development which consists of the development of four- star hotel,
jetty and access road from the jetty to the resort can be proceeded.

Development of 4-star resort and new modern jetty in Tinggi Island

Figure 4.0: The illustration of 4-star resort by Sunway Berhad

Sunway Berhad has allocated RM155,000,000 for the development of 4-star resort which
RM95,000,000 is for the construction cost and another RM60,000,000 is for interior design and
furniture. This resort has been planned fully as a 4-star standard which consist of 230 rooms, complete
with exclusive dining restaurant , spa, gym and even swimming pool. This project is expected to be
completed within 24 months, with 60% of the construction materials will be imported from Japan, China
and Indonesia. Besides, 70% of the interior and furniture materials will be imported from Korea and
China.
Second project of Bayu Sari Marina that was planned to be built in Tinggi Island is the
construction of New Modern Jetty that is estimated to be done within 12 months with the RM2,500,000.
Inline with the development of new modern jetty, Sunway Berhad buys new ferry for about
RM1,400,000.

Upgrading of Tanjung Leman Jetty in Mersing

 Figure 5.0: Tanjung Leman jetty in Mersing, Johor.
This project is about upgrading the existing jetty, which is Tanjung Leman jetty. This jetty is the
famous jetty in Mersing since here is the connected place between mainland in Mersing and many
islands such as Rawa Island, Aur Island and also Tinggi Island. Under this project, Sunway Berhad has
allocated RM3,500,000 budget to upgrade the facilities in this jetty. The development period is
estimated to be done within 15 months. This project obtained via contract award of RM4.8 million from
the Tourism Ministry. Bayu Sari Marina is not only for upgrading the existing jetty, it is also to expand
the jetty size to cater bigger operations capacity.

Figure 6.0: The existing jetty that will be upgraded under Bayu Sari Marina project.
Integrated Specialist Hospital (Health Tourism)
 Figure 7.0: The illustration of the specialist hospital in Mersing.

Sunway Berhad put RM990,000,000 in this specialist hospital’s total budget, that should be
completed in 36 months. This hospital consist of 300 wards, 50 consultation specialist rooms,
laboratories, pharmacy, operation theatre and cafeteria. 10% of the total allocation budget of the
integrated specialist hospital is for the construction of the hospital building , which 60% of the
construction materials will be imported from Japan, China and Taiwan. The medical equipment consists
of RM150,000,000 out of the total cost for the integrated specialist hospital (70% of the materials will be
imported from Japan and Taiwan. Other than that, for the interior design, furniture and fixtures,
RM20,000,000 was allocated for it and other RM700,000 is for the development of the hospital’s
landscape. The balance RM20,000,000 is for the working capital for the hospital to start its services.

Figure 8.0: Some of the medical equipment that has been prepared by Sunway Berhad.
Residential Area in mainland of Mersing, Johor
 Figure 9.0: The illustration of the 15-storey condominium.

Sunway Group has been planned to develop a residential area in the mainland of Mersing. There
are two types of residential area that their company want to build, which are 30-units of double storey
Semi D houses facing the beach and 2 blocks of 15-storey condominium next to the Semi D. These
projects both costs RM21,000,000 and RM150,000,000 with development period 18 and 36 months
respectively.

Figure 10: The illustration of the double storey of Semi D house.

Commercial area in mainland of Mersing, Johor
 Figure 11: The commercial area that Sunway Berhad want to develop.

In this project, the company of Sunway Berhad has planned to build up a commercial area with 1
block of 2-storey building which consists of 20-units shop/office lot. This project is expected to be done
after 2 years with a total budget of RM10,200,000. Other than that, at the same place in Mersing, the
same company want to develop another SME Halal Hub, which is divided into 2 sections. Firstly, Sea
Collection, Processing and Packaging Centre in total of 20 units and Sales Centre mainly to market
products from the previous Sea Collection with the same number of unit lots. This project is awarded by
the Ministry of Agriculture and Agro-Based Industry Malaysia with a contract value of RM70 million.
Both of the projects costs RM55,000,000 and was expected to be completed in 2 years.

Last but not least, Sunway Berhad also has planned for the beautification of Tanjung Leman
Beach for tourism purposes that will costs RM30,000,000 and estimated to be done in a year. This
project catched the eye of the government and has been awarded by the State government with a
contract value of RM38 million.
Figure 12: SME Halal Hub for Sea Collection, Processing and Packaging Centre.

Figure 13: the condition of Tanjung Leman Beach.

CREDIT EVALUATION

Bayu Sari Marina project is a big project that owned by Sunway Berhad. This project seek
financing from the Bank Islam Malaysia Berhad (BIMB). Therefore, in order to give financing to this
project, a credit evaluation has been made in order to trace the ability and performance of Sunway
Berhad. The bank have used the 7C’s assessment which are the capacity of the company, character of
the company, cash, capital, condition that may affect the project, collectivity and the collateral of the
company.

1. Capacity

This first assessment refers to the legal status of the Sunway Berhad. According to Form 9
(Certificate Of Incorporation Of Private Company), Companies Act 1965, Sunway Berhad is a legal private
company that had been register under Companies Commission of Malaysia with the company number
(921551-D). This company incorporated in Malaysia under the Companies Act, 1965. The company
address is at Level 16, Menara Sunway, Jalan Lagoon Timur Bandar Sunway, 47500 Subang Jaya Selangor
Darul Ehsan, Malaysia.

Sunway Berhad also have their own listed name of shareholders. Table 1 shows the list of
shareholders of the Sunway Berhad:

Directors and Substantial Shareholders Substantial Shareholders

1. Tan Sri Jeffrey Cheah 1. Puan Sri Susan Cheah

2. Sarena Cheah 2. Evan Cheah
3. Sungei Way Corporation Sdn Bhd
4. Active Equity Sdn Bhd
 5. Employees Provident Fund Board
Table 1

Other than that, Sunway Berhad run by the Board of Directors. Based on Form 49 of Companies
Act 1965, table 2 shows the listed Board of Directors of Sunway Berhad.

Board of Directors

i Tan Sri Dato’ Seri Dr Jeffrey Cheah Fook Ling, AO

(Executive Chairman, Non-Independent Executive Director),

ii Dato’ Sri Idris Jala

(Co-Chairman, Independent Non-Executive Director,Malaysian),

iii Tan Sri Datuk Seri Razman M Hashim

(Deputy Executive Chairman, Non-Independent Executive Director),

iv Dato’ Chew Chee Kin

(President, Non-Independent Executive Director),

v Sarena Cheah Yean Tih

(Executive Director; Non-Independent Executive Director),

vi Wong Chin Mun

(Senior Independent Non-Executive Director),

vii Datuk Seri Yam Kong Choy

(Independent Non-Executive Director)

viii Lim Swe Guan

(Independent Non-Executive Director, Singaporean),

ix Tan Sri Dato’ Dr. Lin See Yan

(Independent Non-Executive Director),
 x Tan Sri Datuk Dr Rebecca Fatima Sta Maria
(Independent Non-Executive Director, Malaysian).

Table 2

2. Character

Next, character refer to the reputation of the Sunway Berhad and its management. This
assessment help to collect the credit information of the company from participating financial
institutions. The bank also can view the credit histories of the Sunway Berhad. Total liabilities of this
company for last 5 years was keep increasing from only RM5.46 billion (2013), RM6.53 billion (2014),
RM8.79 billion, RM10.52 billion (2016) and RM11.73 billion in 2017. Even so, the asset of Sunway
Berhad also keep increasing from only RM 11.1 billion in 2013 to RM 20.21 billion in 2017. Sunway
Berhad is a well-known company and the company are performing well. There is no doubt with the
performance of the company. For the credit histories and information, Sunway Berhad have a very huge
amount of liabilities, however this company are doing well and the company able to pay all the loan and
debt on time. There is no trace that the company not pay the loan for more than 6 months. Therefore,
this credit information convince the bank to give financing for their project. This is because the company
will able to pay back the amount as promised.

In addition, report for non-financial institution of this company can be trace through CTOS. As
same as the credit information, CTOS more focusing on the non-financial institution which consist of the
utilities bills of the Sunway Berhad and etc. Based on this, the bank have done some research on the
credit information of this company through the CTOS Sdn Bhd. As a result, Sunway Berhad had fulfill
their obligation to pay all the services. Hence, the bank can assume that the company will be able to
keep the same attitude and commitment after the bank give financing to their project.

Furthermore, Sunway Berhad has a good reputation not only among the society but also among
the other competitors and other institutions. There are many media release about the performance of
this company. “Sunway Berhad Posts Steady Results Despite Economic Slowdown” is one of the topic
that released by the media on May 27,2016. This shows that this company can sustained even during
the economy not doing well. Not only that, “Tan Sri Dr Jeffrey Cheah Recognised For His Contributions
Towards Sustainable Development” was released on May 17, 2017. Tan Sri Cheah was conferred the
award in recognition of his vision, exemplary leadership, commitment, and dedication to furthering
sustainability over the last four decades across Malaysia and the region. This prove that the company
run by a group a Board of Director that are reliable and can be trusted. This may lead to sustainability of
the profit gain by the company.

3. Cash
 For this assessment, the bank do an analysis of the cash flow performance of the Sunway
Berhad. In this analysis, the bank focusing on the position of cash flow from the operating activities. The
table and chart below shows the net cash flow from operating activities for 5-year trend. From the chart
we can see that the movement of the cash flow are fluctuate for last 5 years. This information derived
from the Wall Street Journal. Even though the cash flow of this company dropped in 2016, they start to
recover back in 2017. The growth of the net cash flow also seems to increasing from -38.63% to 1.14%.

Year 2013 2014 2015 2016 2017

Net Cash Flow 967,938.0 638,348.0 815,071.0 500,176.0 505,893.0

(RM thousands)

4. Capital
 Sunway Berhad is a big company that have launched many big projects and the projects are
performing well despite all the economy problems. Therefore, we believe that before this, Sunway
Berhad had seeked financing from other financial institutions. There had contributed some of their
capital on the projects also. This assessment is to identify the level of commitment of Sunway Berhad in
order for them to put some financial resources into this project.Sunway Berhad had mentioned about
their capital commitment in their report. Capital commitment not provided for in the financial year as at
30 September 2017 is as follows:

30/9/2017 31/12/2016
RM'000 RM'000
Amount authorised and contracted for 58,459 66,164
Amount authorised but not contracted for 192,057 150,370
250,516 216,534

Thus, it is clear that Sunway Berhad was committed to inject some capital for their project
rather than only depends on the bank to finance their project.

5. Conditions

In order for the bank give financing to the project, the bank should recognize any future
potential problems that may affect the project and also the repayment ability by the company. The
project is a very high risk project since the Sunway Berhad want to develop new tourism area. The bank
recognized that there are many potential problems may arise throughout the process such as political
policy by the government. This may happen when the government increase the tax for the tourist who
come to Malaysia. This may affect the profitability of the project and may affect the repayment of
financing to the bank when they do not have enough income to make the repayment.

In addition, other condition that may arise is natural disaster. The project was proposed in the
two places which located at Mersing and Tinggi Island. Location of Mersing as mainland that located at
inhabited island may expose to natural disaster. When undesirable things happen at this place, the
company will facing losses especially when the project cannot continue due to this problem.

Furthermore, the performance of economy also can give effect to the project. For further
illustration, when the economy are not performing well, it may affect the income of the company
especially the revenue from this project. For instance, change in currency may affect the profit. When
the Ringgit Malaysia depreciate, the cost of raw material will be increase. As a result, the company may
charge high price for the service. This situation will reduce the number of tourist and also reduce the
revenue. Hence, the company will not able to pay back the bank on time.

6. Collectivity

Collectivity assessment linked to the ability of the company to repay back to the bank. This refer
to the recovery prospects in the event of default. The bank do not want bear any risk when the company
not able to the pay back. This is to securitize the financing from the case of default. As mentioned in the
point above, this company have good reputation in terms of making repayment for their financing. With
the ability of this bank to remain sustain even during the economy slow down, the bank trust that this
company will able to make repayment for the financing.

7. Collateral

Giving financing to the big project involve high risk and default may happen. Therefore, the bank
ask for collateral from the Sunway Berhad before give financing to the project. Sunway Berhad is one of
the largest conglomerate in Malaysia. This company have a lot of assets that can be as collateral for the
financing. Based on annual report 2016 of Sunway Berhad, the company have recorded the list of their
material properties. The material consist of land and property such as Sunway Velocity Mall and Car
Park, Sunway South Quay, Kelana Jaya Land, Paya Terubong Land, Sunway Monash Hostel and many
else. The important of this collateral is it must have value and have same or high value than the amount
of the financing that the company seek from the bank. This is to make sure that Sunway Berhad keep
repay their financing, if not the bank will possess the collateral asset.
Credit Scoring

The table below illustrate the credit scoring that done by the Head of Business Financing according to
the 7Cs that mentioned before.

Rating :

1 - Very Poor 2 - Poor 3 - Average 4 - Good 5 - Very Good

No 7’Cs 1 2 3 4 5 Justification

1 Capacity ✓ ● Stable company that had been

establish for 38 years.
● Board of directors won many
awards and can maintain the
good reputation of the
company.

2 Character ✓ ● Sunway Berhad have a good

credit history.

3 Cash ✓ ● There is fluctuation of the cash

flow.

4 Capital ✓ ● Sunway Berhad willing to

contribute some capital to the
project.

5 Condition ✓ ● There are many potential

problems that can affect the
project.

6 Collectivity ✓ ● The bank will be able to collect

and get repayment from the
Sunway Berhad.

7 Collateral ✓ ● Sunway Berhad have many

assets that can be as collateral
for the financing.

PROPOSED FINANCING PACKAGE / STRUCTURE

NO. TYPES OF PROJEC AMOUNT FACILITIES CONTRACT MARGIN PROFI TENUR NOTES
DEVELOPMENT T COST OF OF T E
FINANCIN FINANCIN RATE
(RM) G G (month
% s)
m= (RM) %
million

1. Site clearance 850 - Not Not - - - Sunway Berhad

M financed finance will finance
d independently by
using their fund.

2. Resort (4 star) which consist of 230 rooms, exclusive dining restaurant,spa,gym, and swimming pool.
Total project cost RM 155,000,000.

a) Construction 95 M 85.5 M Project Istisna 90% 3.5 24 Syndication basis

cost Financing % of 3 Banks:

(Syndication Bank Islam (lead

) bank) - 40%

Bank Muamalat -
30%

Public Islamic
Bank- 20%

Sunway Berhad-
10%

Supporting

Contract : Letter
of Credit
Transfer- i (0.1%
commission fee of
ILC value)
 b) Interior and 60 M 48 M Asset Tawarru 80% 4% 24 Bank Islam - 80%
Furniture Financing q
Sunway Berhad-
(Business 20%
Cash Line-i)
Supporting

Contract : Letter
of Credit
Transfer- i (0.1%
commission fee of
ILC value)

Construction of 2.5 2.0 M Project Istisna 80% 3.5 12 Bank Islam- 80%
New modern M Financing %
3. Sunway Berhad-
jetty
20%

4. Upgrading of 3.5 2.45 M Contract Istisna 70% 3% 15 Bank Islam - 70%

existing jetty M Financing
Sunway Berhad -
(Procureme 30%
nt and
Contract
Financing-i)

5. New ferry 1.4 1.26 M Asset Ijarah 90% 4.5 60 Bank Islam- 90%
M Financing %
Sunway Berhad
(Leasing-i) (deposit) - 10%

6. Integrated Specialist Hospital (Health Tourism) which consist of 300 wards, 50 consultation specialist
rooms, laboratories,pharmacy, operation theatre and cafeteria. Total project cost RM 990,000,000.
a)Construction 100 80 M Project Istisna 80% 3.5 36
of hospital M financing %
Syndication basis
building
(Syndication of 3 Banks:
)
Bank Islam (lead
bank) - 40%

Bank Muamalat -
30%

Public Islamic
Bank- 10%

Sunway Berhad-
20%

Supporting

Contract : Letter
of Credit
Transfer- i (0.1%
commission fee of
ILC value)

b) Medical 150 112.5 Asset Bai’ 75% 4.5 36 Bank Islam - 75%
equipment M M Financing Bitham %
Sunway Berhad-
an Ajil
(Equipmen (“BBA”) 25%

t&

Commerci

al

Property

Financing
 -i)

c) 20 M 14 M Asset Tawarru 70% 4% 36 Bank Islam - 70%

Interior,furnitu Financing q
Sunway Berhad-
re, and fixtures
(Business 30%
Cash Line-i)

d)Landscape 700 K 350 K Asset Bai’ 50% 2% 36 Bank Islam - 50%

Financing Bitham
Sunway Berhad-
an Ajil
(Equipmen (“BBA”)
50%

t&

Commerci

al

Property

Financing

-i)

e)Working 20 M 12 M Asset Tawarru 60% 3% 36 Bank Islam - 60%

Capital Financing q
Sunway Berhad-
(Business 40%
Cash Line-i)
7. Residential 21 M 16.8 M Bridging Tawarru 80% 3.5 18 Syndication Basis
area- financing q % of 2 Banks:

30-unit double (Syndication Bank Islam(lead

storey Semi D ) bank) - 45%
houses facing
Affin Bank - 35%
the beach.
Sunway Berhad -
20%

8 Residential 150 135M Project Istisna 90% 5% 36 Syndication Basis

area- M Financing of 4 Banks:

2 blocks of 15- (Syndication Bank Islam(lead

storey ) bank) - 30%
condominium
Bank Muamalat-
next to the
20%
Semi D.
Affin Bank - 20%

Public Islamic
Bank- 20%

Sunway Berhad-
10%

9 Commercial 10.2 7.14 M Project Istisna 70% 3% 24 Syndication Basis

area- 1 block of M Financing of 2 Banks:
2-storey
(Syndication Bank Islam (lead
building which
) bank)- 40%
consist of 20-
unit Affin Bank - 30%
shop/office lot.
10 Commercial 55 M 38.5 M Contract Istisna 70% 4.5 24 Syndication Basis
area – SME Financing % of 3 Banks:
Halal Hub,
(Procureme Bank Islam (lead
which is
nt and bank) - 30%
divided into 2
Contract
sections Public Islamic
Financing-i)
Bank - 20%
(i) Sea
Collection, Affin Bank- 20%
Processing and
Sunway Berhad-
Packaging
30%
Center – 20
lots (Pusat
Pengumpulan,
pemprosesan
dan
pembungkusan
hasil laut

(ii) Sales
Centre mainly
to market
products from
(i) above – 20
shop lots.

11 Beautification 30 M 15 M Contract Istisna 50% 2% 12 Bank Islam - 50%

of Tanjong Financing
Sunway Berhad -
Leman Beach
(Procureme 50%
for tourism
nt and
purposes
Contract
Financing-i)

TOTAL 570.5
M

● Total Financing Amount by Bank Islam is RM339,186,000

 ● More than 5 BANKS are participating in this project with combined total amount of financing of
RM 570,500,000
● Bank Islam will be collecting 2% wakalah fee from all participating banks for representing and
protecting their interest in this project.

STRENGTHS AND WEAKNESSES OF THE PROJECT

Strengths:

Sunway berhad is a relatively stable and successful business operating company since it was
established.And normally, the big company always have such various product to operate the company
profitable. For sunway bhd, it is a company that through 12 business divisions , like property,
construction, retail, hospitality, leisure, healthcare, education, commercial, trading and manufacturing,
building materials, quarrying and Real Estate Investment Trust (REIT). As normal concern, the people will
choose the most representative company to operate their business purpose, and also they will choose
the company which has many sector can fulfill their financial needs. So for this particular project, the
Sunway Bhd can fulfill all the project needs. And whatever when a special project come, the first thing
need to be considered is that the performance, the process period, and also the quality status. So if
want to achieve the requirement according to above, the Sunway Bhd can be the best one to be
considered.
The 35 acres mainland will be developed into the place of Mersing, the most important point need to
be pay attention to is the future development of that area. So the predominant character what Mersing
can be provided is:
Location: Mersing is located in Johor Bahru, Malaysia. It’s location provided benefit for developing
widely. And it remains as a fishing village despite the developing city centre of Johor Bahru. It is the main
departure spot for many islands. Even it can be described as a center hub to connect the business
between land and island.
External environment: for the residential construction, first, the materials using can totally be fit by
Sunway Bhd. second, the benefit for a residential to be build in this place is because here no many
population yet. So the pollution rate for this area is very low, so the environment will be suitable for
people to live, they will get some invisible protection from the natural environment, so this can also be
an attractive factor.
Job opportunity once the residential was built in this place, the people who live here may need the
economic support to survive here, so this moment, the commercial area can be connect to resident
living resources, the people who can live with a longer period because they can have adequate daily
needs. So therefore, it will provide more opportunity for the resident.
Trade transaction: the resort and the New Modern Jetty will be build in Tinggi Island. The
advantage of this area is it will really increase the possibility of trade transaction. And thus, the project
can bring some profit gain to the original resident, and also will match with the other construction of
this project.

Weaknesses:
Environment pollution: when we introduce a new project, we always stated first that all the
advantages does this project can bring to us, but at the same time, we also need to consider what will
be the influence towards the original resident there. According to this project, once a project start, there
must be some pollution will be caused. Because for construction some new thing, normally need to be
explore some original part, so this time, the land pollution, air pollution, and etc…... The development
also along with the pollution.
Cost:another big problem is generally, for this kind of big project, like the Bayu Sari Marina project
expected to be finished in 3 years, but the site clearance need to be done first, which need 2 months.
The initial cost is huge, but the period for profit recovery is long. So the most of the bank will be
challenged by the initial cost is really take time covered by the sales for working capital to operate get
the profit gain.
Safety: when a new coming project was start, the worker demand is huge, so during the hirement of
the worker process, there is something cannot be predicted. For example such as the worker will be
come from other country and the developer has no many personal information for them, if the worker is
someone who was be tracked or they are dangerous community. If the company hire this kind of
people, it will affect the reputation of the company and also cause some unbelievable accidents to be
happened.
Social matters: normally, when a new project comes to be started, the social matters also will be
ignored, but actually, the most important thing need to be take in consideration is this one. Why like
this, because the human factors always will affect everything effectively. Back to the construction will be
done in Mersing. The surrounding personal factor need to be do a research before. And then some
progress maybe they can help the project finish quickly and also provide some spiritual assistance. If
neglect this factor, maybe will cause some difficulty to the project, even affect the project building
process.
RECOMMENDATION:
Financial amount:the total cost of this project is Total Financing Amount by Bank Islam is
RM339,186,000. More than 5 BANKS are participating in this project with combined total amount of
financing of RM 570,500,000. Bank Islam will be collecting 2% wakalah fee from all participating banks
for representing and protecting their interest in this project.
Tenure: Bank Islam will finance for commercial area and residential property development projects.
We plan to help Sunway Berhad have sufficient cash flow during construction and waiting to receive
sales revenue from the ultimate purchaser and its ultimate financier. This is also a way to ensure the
development can be continuous finished till end. So we plan to make 10 years financing term for Bayu
Sari Marina project development.
 Security: In 2017, Sunway Property acquired five parcels of land suited for transit-oriented
developments, which had a total GDV of RM5.5bil and size of 37.4 acres. As so for, the company’s total
landbank amounts to 3,305 acres with a total GDV of RM53bil, with 56% of the landbank located in
Johor, 30% in Klang Valley, and 6% in Penang. So, we will take corporate guarantee from Sunway Bhd
and Sunway Property.
Financing rate: The financing rate on this project is between 5% to as high to 8% on the residence
project. However, in Mudarabah contract there is a profit sharing ratio between the financier and the
developer with 68: 32. In Musharakah the banks will share their profit according to their contribution to
the project.

REFERENCES

Annual Report 2016, Sunway Berhad. Retrieved from

https://ir.chartnexus.com/sunway/doc/ar2016.pdf

Bank Islam Malaysia Berhad, Website. Retrieved from

http://www.bankislam.com.my/home/

Company overview of Sunway Berhad, Bloomberg. Retrieved from

https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=116206338

Sunway Berhad ( Company No : 921551-d ), Quarterly Report On Consolidated Results For The Financial
Period Ended 30 September 2017.Retrieved from
https://ir.chartnexus.com/sunway/doc/Q3_2017.pdf
Sunway, Media Release, 2017. Retrieved from
https://www.sunway.com.my/media-centre-2017/

The Wall Street Journal. Retrieved from

http://quotes.wsj.com/MY/SUNWAY/financials/annual/cash-flow

APPENDIX