SriLankan gets $175m sukuk from Gulf banks
Dubai, July 1, 2012
SriLankan Airlines signed a $175 million sharia-compliant loan, a statement from one of the arranging banks said on Sunday, the first time the carrier has borrowed from the international syndicated loan market.
The state-owned airline completed the four-year facility with Abu Dhabi Islamic Bank, Abu Dhabi's Al Hilal Bank, Mashreq Bank, Dubai's Noor Islamic Bank and United Bank Limited, a statement from Mashreq's Islamic arm said.
The loan was provided in dollars and UAE dirhams and will be repayable from ring-fenced cash flows, the statement added.
Mashreq Al Islami acted as the coordinating bank.
"The successful closure of this transaction is clear evidence of the growing acceptance of the Sri Lanka credit story in international markets," said John Iossifidis, head of international banking group at Mashreq.
He emphasized the growing importance of Sri Lanka in the region and how Mashreq, in conjunction with its other key partner banks, have been instrumental in closing the facility despite the difficult global liquidity conditions continuing.
He added, “Sri Lanka is a key strategic market for Mashreq and we are committed to working alongside our core relationship clients, to explore different forms of capital raising."
This transaction marks an important foray in the Islamic banking space by a major corporate based in Sri Lanka and should pave the way for many similar transaction in the future.
SriLankan Airlines, the national carrier of Sri Lanka, currently operates a fleet of 19 aircraft covering 60 destinations across the globe with an increasing presence in the Middle East and Asia.
The successful arrangement of this facility will financially strengthen SriLankan Airlines at a time when the Government of Sri Lanka expects the airline to be a catalyst for the further growth of Sri Lanka’s economy, especially tourism and export industries. - TradeArabia News Service & Reuters