122 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2024 Capital strategies A key enabler for all our businesses is ensuring that we have sufficient capital to continue delivering on our projects and exploring new opportunities. Our capital strategy includes: • On a project level, our capital strategy focuses on equity sell-down, refinancing and re-leveraging, which allows us to augment cash flows to enhance returns of our ongoing investments, thereby accelerating the returns to be deployed into new projects. • On a platform level, Yinson’s long-term equity structure includes perpetual securities and Sukuk Mudharabah. These instruments allow us to raise capital while not diluting the equity of our existing shareholding. • Corporate borrowings enable us to be flexible when providing funding for our equity requirements. Our strong relationships with our financing and funding partners have enabled us to innovate deal structures that have been well-received. • Financial instruments that are linked to sustainability performance, such as our sustainability-linked sukuk, allow us to capitalise on our leadership position in sustainability whilst incentivising us to manage our business more sustainably. • Financing partners, with whom we have also been actively innovating and exploring alternative financing options, including project-level preference shares, non-recourse project financing, junior loans and local currency financing. In FYE 2024, we established several financial partnerships that support Yinson’s transition journey and green businesses. This includes USD 300 million in financing from global investment firm RRJ Capital to support the construction of FPSO Agogo, where all major components in our Zero Emissions FPSO Concept are being installed, and a corporate loan facility of up to USD 500 million, with a portion of the facility designated for green initiatives to support our continuous efforts in innovating and introducing cutting-edge technologies to reduce emissions. Another new financing partnership was a USD 230 million financing, structured and arranged by Global Infrastructure Partners, in relation to FPSO Maria Quitéria. Managing our leverage indicators Keeping our financial covenants and debt servicing requirements are cardinal requirements when planning and deploying our capital strategies and market activities. This is both a risk management measure and a way to ensure that we are building our businesses on the optimal capital structure. We manage our operation funding structure to ensure smooth repayment over the course of our assets’ contracted periods. A key feature of Yinson’s project financing loans is that they are non-recourse to Yinson once operational, with Yinson’s guarantee being released from the project financing loan. Once the project financing loans become non-recourse, the project financing lenders are only entitled to repayment from cash flows of the projects the loan is financing, and not from any other assets of Yinson. Investor relations and stakeholder engagement Foundationally, we ensure that we adhere to all mandatory disclosure requirements, as described in the ‘Disclosure and stakeholder communication standards’ section of our Corporate Governance & Business Ethics material topic, pg 125. However, our engagement with our stakeholders extends far beyond just the required disclosures. Robust stakeholder engagement is a strategic imperative for Yinson because it fosters trust, collaboration and sustainable growth. We proactively engage with our stakeholder groups to communicate our value proposition and capture feedback to ensure mutual and sustainable relationships in the long run. By involving stakeholders in our decision-making processes, we ensure that our actions align with the interests and values of those we impact. Productivity and innovation Efficient utilisation of resources, across all capitals, drives productivity. Streamlining processes, investing in technology and fostering a culture of continuous improvement are essential. In this respect, we consider digitalisation and utilising technology to drive productivity as a material matter. We believe that embracing innovation is crucial to our ability to stay ahead. Innovation is the engine that drives growth, allowing us to directly create more value for our stakeholders, attract talent, foster collaboration, and drive economic growth. A culture of innovation is a must in order for us to respond quickly to market challenges and opportunities. Thus, we actively invest in research & development to cultivate open innovation approaches, maximise efficiency gains, reduce costs and generate revenue. Concurrently, our active participation in these activities attracts like-minded potential employees and strategic partners. Our commitment to building a culture of innovation is reflected and integrated into all our people processes, from hiring to performance management and rewards and compensation. Every Yinson business, led by their respective Advisory Boards and Senior Leadership Teams, are given the impetus and resources to innovate, both to create efficiencies in their current processes and develop new ways of doing things. Integrity in corporate reporting and meaningful relationship with stakeholders, pg 154. Digital transformation, pg 128 - 130. Innovation case studies, pg 29 - 32.
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