KARACHI: Trading in the privately placed Rs6.7 billion Islamic bond of K-Electric Ltd will commence on the Pakistan Stock Exchange on Friday (May 12).

Also known as sukuk, the certificate will be traded through the Bond Automated Trading System (BATS) on the PSX and will be settled through the National Clearing Settlement System.

The purpose of the issue is to fund the company’s routine operational and capital expenditure requirements.

The Sharia-compliant bond has a tenor of seven years. It offers a floating coupon rate of three-month Karachi interbank offered rate (Kibor) plus 170 basis points. Only qualified institutional buyers will be able to buy and sell the instrument with a market lot of one sukuk certificate having a face value of Rs100,000.

The financial performance of K-Electric took a nosedive in the first three quarters of 2022-23, with a net loss of Rs39.4bn versus a net profit of Rs1.5bn a year ago. The quarterly loss in January-March alone amounted to Rs12.3bn, up 6.7 times from the same quarter of the preceding year.

The largest investor in the latest sukuk issue was the Sindh Province Pension Fund, which invested Rs1bn in the Rs6.7bn instrument, followed by Pak China Investment Company Ltd (Rs750 million).

Published in Dawn, May 11th, 2023