Why did the company opt for shariah and not conventional financing ? We are a shariah counter and recognise the importance of ensuring that we remain shariah compliant . We understood early on in the process that we were in a position to meet the requirements for the CRPS to be shariahcompliant , and management did not hesitate to take the route of obtaining the necessary endorsement from the SC , with the guidance of our shariah adviser , CIMB Islamic .

This instrument also allows us to play a role in strengthening the overall Islamic capital markets in Malaysia , stimulating the development of other shariah-compliant products and services in addition to Sukuk and shariah-compliant stocks . Islamic equity instruments are seen to be less developed compared to the Islamic fixed income market , i . e . the Sukuk market . We are hopeful we can play a small but meaningful part in championing and spurring the growth of the Islamic equity capital markets in Malaysia , for others to follow suit .

Has the company identified any potential acquisitions for the RM2 bil proceeds and if so , what are they ? Yes , we have identified a pipeline of target assets . However , we are unable to disclose further details due to various non-disclosure agreements which we have executed with the vendors .

What criteria did you have to fulfil for Hibiscus shares to be shariah-compliant ? The Shariah Advisory Council ( SAC ) of the SC adopts a two-tier quantitative approach , which applies the business activity benchmarks and the financial ratio benchmarks , in determining the shariah status of the listed securities . Hence , the securities will be classified as shariah-compliant if their business activities and financial ratios are within these benchmarks .

Business activity benchmarks

The contribution of shariah non-compliant activities to the Group revenue and Group profit before taxation of the company will be computed and compared against the relevant business activity benchmarks as follows :

( i ) The five-per cent benchmark The five-per cent benchmark applies to the following businesses / activities :

• conventional banking ;

Our shares became shariahcompliant on May 26 2017 . Since then the only fundraising we ’ ve conducted ( apart from this CRPS ) has been the private placement of our shares .”

• conventional insurance ;

• gambling ;

• liquor and liquor-related activities ;

• pork and pork-related activities ;

• non-halal food and beverages ;

• shariah non-compliant entertainment ;

• tobacco and tobacco-related activities ;

• interest income from conventional accounts and instruments ( including interest income awarded arising from a court judgement or arbitrator );

• dividends from shariah non-compliant investments ; and

• other activities deemed non-compliant according to shariah . For the businesses mentioned above / activities , the contribution of shariah non-compliant businesses / activities to the Group revenue or Group profit before taxation of the company must be less than five per cent .

( ii ) The 20-per cent benchmark The 20-per cent benchmark applies to the following businesses / activities :

• share trading ;

• stockbroking business ;

• rental received from shariah non-compliant activities ; and

• other activities deemed non-compliant according to shariah . For the businesses mentioned above / activities , the contribution of shariah noncompliant businesses / activities to the Group revenue or Group profit before taxation of the company must be less than 20 per cent .

Financial ratio benchmarks

For the financial ratio benchmarks , the SAC takes into account the following :

( i ) Cash over total assets Cash only includes cash placed in conventional accounts and instruments , whereas cash placed in Islamic accounts and instruments are excluded from the calculation .

( ii ) Debt over total assets Debt only includes interest-bearing debt , whereas Islamic financing or Sukuk is excluded from the calculation .

Each ratio , which is intended to measure riba and riba-based elements within a company ’ s statements of financial position , must be less than 33 per cent . In addition to the above two-tier quantitative criteria , the SAC also takes into account the qualitative aspect , which involves public perception or image of the company ’ s activities from the perspective of Islamic teaching .

Were your previous fund-raising exercises shariah-compliant as well ? Our shares became shariah-compliant on May 26 2017 . Since then the only fund-raising we ’ ve conducted ( apart from this CRPS ) has been the private placement of our shares .

What are your views on the prospects for the oil & gas industry ? Our performance is most sensitive to oil prices . Oil prices softened when demand reduced due to Covid-19 . We will recover from the effects of Covid-19 and economies will gradually recover . Oil prices will also recover .

What is important is the ability to survive through this period of uncertainty . In this regard , the fact that we have little or no debt , a low operating cost structure and a dedicated workforce determined to keep operations going helps us to maintain business continuity . We also have a product that has a market , even though currently oil prices are soft .

Hibiscus has a clear vision of being a respected and valuable international oil company . How close is it to achieving this vision ? We work towards the achievement of a vision , knowing it is a journey and not a destination . Along the way , there will be many humps on the road , but it is important that we adapt and deliver value to all our stakeholders .