PIA - Pakistan International Airlines (PK, Islamabad International) will issue a ten-year sukuk later this month, worth up to PKR20 billion rupees (USD126.7 million) including a greenshoe (over-allotment) option of PKR5 billion (USD31.6 million), an abridged term sheet seen by ch-aviation reveals.
The purpose of the Islamic bond issue is to meet its permanent working capital requirements and for the settlement of part of its existing financing facilities, both conventional and Islamic, it outlined.
The sukuk will come inclusive of a two-year grace period and will be repaid in 96 equal monthly instalments. Classified as a “public sector sukuk”, it will be privately placed and 100% backed by government guarantee, with BankIslami Pakistan acting as joint book-runner, advisor, and investment agent on the issuance.
As previously reported, the same bank’s president and chief executive, Amir Ali, mentioned the possibility of a sukuk “for the aviation industry” in October 2020 without specifically naming the heavily indebted state-owned flag carrier.
The registration of bidders will take place from July 9 to 12 inclusive, during banking hours, and the book-building process will take place on July 13 and 14.
Haris Munawar, head of investment banking at BankIslami, confirmed the details of the shariah-compliant sukuk to The News International newspaper on July 4. He added that Pakistan’s Ministry of Finance had given statutory liquidity ratio (SLR) status to the measure and predicted that it would “open the gates for similar public-sector issuances in the future.”
The sukuk will be allotted on July 16 and will subsequently be listed on the Pakistan Stock Exchange by August, he said.
