John Foster reports on $100 million Musharaka Sukuk from the UAE's Thani Investments
Normally when we write about the ever increasing Sukuk issuance game in the GCC the usual suspects are the big banks or companies with a large government interest. There are not that many companies in private hands that play the game, especially to the tune of $100 million.
One of the first is Dubai's Thani Investments, who might lead the way for other private conglomerates and family run businesses to step into the Islamic capital markets to find funding. Who knows, we might soon see Sukuk issued in the name of families such as the Al Habtoor, Bin Hendi or Al Ghurair?
Thani Investments has built up a varied portfolio of businesses, including interests in mining, gold and property. The Sukuk was arranged by Emirates Islamic Bank of the UAE and the Liquidity Management Centre of Bahrain. Rishard Camball, chief financial officer explained, "Islamic finance is here to stay, and in the group we have underlying investments, such as our property portfolio, that can be collateralised and used to help maintain and increase the momentum of our business. By issuing this Sukuk, we are ensuring that Thani Investments has a bright future"
Launched in September 2007, the debut issue from Thani Investments raised significant interest from regional and international institutional investors, and was significantly oversubscribed at the close. Emirates Islamic Bank and Liquidity Management Centre acted as joint mandated lead arrangers; Commercial Bank of Dubai as the senior lead manager; Dubai Islamic Bank and the Arab Investment Company as lead managers; Bahrain Islamic Bank and Khaleeji Commercial Bank as co-lead managers and Sharjah Islamic Bank as manager. The Sukuk has a tenor of five years, with an average life of approximately 3.5 years.
Thani Investments is one of the region's first privately owned companies to issue Sukuk and Camball claimed that "more and more private institutions are looking at Islamic finance to help develop their businesses. There are a lot of assets in the region that could be securitised and then used to unlock liquidity to reinvest in business growth."
His chairman, Abdulla Saeed Al Thani was also upbeat, "As one of the first private companies in the region to issue a Sukuk, we are proud to once again be leaders in our field. The success of this debut issue demonstrates the market's confidence in Thani Investment's business model and success to date, and we are confident that the team will continue to deliver sound results across our business divisions. The team effort of both Emirates Islamic Bank and Liquidity Management Centre was integral to the successful close of this issue, and we look forward to working with them in the future."
Camball claimed, "There are tremendous opportunities in Dubai Golf City, one of Thani Investment's showpiece projects, and it would be possible to do an Ijarah Sukuk on the back of this."
The Thani Investments Sukuk is a big enough issue to make people sit up and take note. Moreover, being issued by a private company is a brave move, but leads the way for more family businesses to use the Islamic capital markets to consolidate and enhance their positions.
Banker Middle East 2007
