PIA Sukuk-I raises Rs5.7 billion

Published July 16, 2021
PIA intends to use sukuk proceeds for its permanent working capital requirements and partial settlement of existing conventional/Islamic financing facilities. — AFP/File
PIA intends to use sukuk proceeds for its permanent working capital requirements and partial settlement of existing conventional/Islamic financing facilities. — AFP/File

KARACHI: The Pakistan International Airlines (PIA) raised Rs5.7 billion on Thursday with the conclusion of the book-building process for PIA Sukuk-I at the cut-off price of one-month Karachi interbank offered rate (Kibor) plus 100 basis points.

It’s the first corporate Islamic bond of 2021, which is government-backed and can be counted towards the statutory liquidity requirement of investing entities.

Speaking to Dawn, BankIslami head of Investment Banking Mohammad Haris Munawar confirmed the cut-off price for the 10-year Islamic debt instrument. BankIslami was the adviser and one of the three joint book-runners for the issue. Around 25 eligible investors participated in the bidding process, he added.

The book-building process was conducted for the issue size of Rs20bn, including the greenshoe option of Rs5bn. However, the response from investors was underwhelming, which forced the Minis­try of Finance and the PIA to limit the issue size to Rs5.7bn.

PIA intends to use sukuk proceeds for its permanent working capital requirements and partial settlement of existing conventional/Islamic financing facilities.

“The instrument is more lucrative than the recently issued energy sukuk, but some investors held back probably because Covid-related travel restrictions have affected the airline business worldwide,” said Mr Munawar.

The instrument was privately placed, but will soon be listed on the Pakistan Stock Exchange.

Published in Dawn, July 16th, 2021

Opinion

Editorial

Dark days
Updated 26 May, 2022

Dark days

The PTI, on its part, does not seem to have been prepared to face such a large deployment of state machinery.
26 May, 2022

No room for dissent

WHILE political turmoil roils the land, a number of incidents over the past few days have demonstrated that though...
26 May, 2022

Harassing passengers

REPORTS of the confiscation of personal items from passengers’ private luggage by customs officials at Karachi’s...
Back to bedlam
Updated 25 May, 2022

Back to bedlam

FEAR tactics have never worked in the past, and most likely will not this time either. The government’s ...
25 May, 2022

Balochistan blaze

THE forest fire on the Koh-i-Sulaiman range in Balochistan’s Shirani area is among a series of blazes to have...
25 May, 2022

Unequal citizens

INDIFFERENCE would have been bad enough, but the state’s attitude towards non-Muslims falls squarely in the...