Structure of Sukuk Musyarakah -2

Sukuk Musyarakah programme shall be established to facilitate the issuance of the Sukuk Musyarakah from time to time.

   1. The Musyarakah Venture (partnership arrangement) shall be entered into between the Investors (Musyarakah Partners) to finance the Musyarakah venture or construction of the project whereby all Musyarakah Partners shall  contribute capital contribution for such purpose and any profits from the Musyarakah venture shall be distributed among the Musyarakah Partners based on the profit sharing ratio as pre-agreed amongst them. Any losses will be apportioned based on the capital contributed.

   2. The Musyarakah Venture shall be carried out through the Issuer in its capacity as an agent to construct and/or oversee the overall development project and to receive the capital contribution in the Musyarakah Venture.

   3. In return for the Musyarakah Partners’ capital contribution under the Musyarakah Venture, the Issuer shall issue the Sukuk Musyarakah to the Musyarakah Partners.

   4. The Trustee shall declare a trust over the Trust Asset and all rights under the Musyarakah Venture for the benefits of the Musyarakah Partners.

Sukuk Using Musyarakah Structure - 1

Corporate and the Special Purpose Vehicle (SPV) enter into a Musharakah Arrangement for a fixed period and agreed profit sharing ratio and the appointment of the Corporate as an agent to develop the land. Any losses will be apportioned based on the capital contributed. The corporate undertakes to buy Musharakah shares of the SPV on a periodic basis.

   1. Corporate (as Musharik A) contributes land or other physical assets to the Musharakah

   2  a & b. SPV (as Musharik B) contributes cash i.e. the issue Proceeds received from the investors to the 
       Musharakah

   3. The Corporate as an agent of the Musyarakah to develop the land (or other physical assets) with the cash injected  
       into the Musharakah and sell/lease the developed assets on behalf of the Musharik B.

   4. In return, the agent (i.e. the Corporate) will get a fixed agency fee plus a variable incentive fee payable.

   5. The profits are distributed to the Sukuk holders.

   6. The Corporate irrevocably undertakes to buy at a pre-agreed price the Musharakah shares of the SPV on say  
       semi-annual basis and at the end of the fixed period the SPV would no longer have any shares in the Musharakah.


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