Sukuk offering gains momentum
Manama, September 20, 2007
Bahrain-based Liquidity Management Centre (LMC) and Emirates Islamic Bank have gained significant momentum on the Al Ahlia Real Estate Project's Company (Arepco) sukuk issuance.
LMC is the mandated lead arranger and Emirates Islamic Bank the co-arranger and senior lead manager of the sukuk.
The two-year sukuk is a pre-IPO equity linked sukuk, with an eight per cent profit rate payable semi-annually.
The objective of the issue is to purchase up to 49 per cent equity in Arepco at a dollar equivalent of 0.325 Kuwaiti fils per share, through prospective investors as a pre-IPO sukuk offering.
Arepco is currently a wholly-owned subsidiary of Al Ahlia Holding Company (AHC) Kuwait.
AHC will continue to hold a 51 per cent stake in Arepco after the sukuk offering, and the company will remain the real estate arm of AHC.
The sukuk may be listed on the Bahrain Stock Exchange or other suitable stock exchanges regionally.
The sukuk's marketing has kicked off and is already seeing a strong demand from regional and international investors.
The sukuk offering is aimed primarily at institutional investors, targeting banks and financial institutions, fund managers, pension funds and insurance companies.
Individuals are also eligible to purchase the sukuk directly through LMC or their agent banks.
There will be multiple closings for the issuance for which the first closing is scheduled for end of this month.
'The issuance is priced very competitively bearing in mind the nature of the industry and being an equity linked Sukuk for a company with an impressive growth and track record,' LMC chief executive Ahmed Abbas said.
'This will inevitably, contribute to the development of the vibrant capital markets in the region and complement the equity markets and benefit a wider economy'.
LMC has successfully closed a $200 million sukuk late last year for Arepco, formerly known as Al Ahlia Gulf Holding Company, obtaining five years financing for the projects and operations. TradeArabia News Service