We are pleased to announce the successful completion and signing of the three-year amortizing Facility.
Liquidity Management House for Investment Company, Kuwait ("Liquidity House"), BNP Paribas ("BNP") and Gatehouse Bank plc, London ("Gatehouse") were the Initial Mandated Lead Arrangers ("IMLAs"). Liquidity House and Gatehouse were bookrunners. In general syndication, the IMLAs were joined by Ahli United Bank B.S.C. and Boubyan Bank K.S.C. as Mandated Lead Arrangers, E'amar as Lead Arranger, Kuwait Finance House (Malaysia) Berhad as Arranger and European Finance House Limited as Co-Arranger.
The debut Facility for Burgan was oversubscribed although the Company decided to close the Facility at the original amount. The funds raised will be used to finance the purchase of four oil rigs and is fully secured by the rigs and their associated off-take contracts with the Kuwait Oil Company (KOC).
Burgan Company for Well Drilling, Trading & Maintenance K.S.C.C was founded in 1970. The Company was listed on the Kuwait Stock Exchange in 2005 and has a market capitalization of KD 109.434 million (US$ 400.56 million) as at December 31st 2008. As at March 31st 2008 (2008 financial year end), the Company's Net Profits were KD 9.5 million (US$36.0 million), representing a record 23.3% increase relative to the previous year. During the current nine month period ended 31st December 2008, the Company has shown increase in revenues by 16.5% as compared to corresponding previous year period.
Burgan has operations principally in Kuwait and Bahrain. Burgan has a close and longstanding relationship spanning almost 40 years with KOC and its parent, Kuwait Petroleum Corporation, largely through the Al Hamad family, a well known and well respected family in the close-knit Kuwaiti business community, and in particular through Mr. Ahmed Al-Hamad, who has taken over as Chairman and Managing Director from his father, the late Mr. Hamad Al-Hamad, one of the founders of Burgan. The Chairman is a very prominent Kuwaiti national and enjoys a strong reputation in the industry.
Mr Ahmed Al-Hamad, Chairman of Burgan, said that being the debut facility for Burgan, he was overwhelmed by the support received from the banks. He further thanked the Initial Mandated Lead Arrangers and all the participants for making this landmark deal a grand success.
Emad Al Monayea, Chairman and Managing Director of Liquidity House, said the successful signing of the transaction was testimony to the financial soundness and reputation of Burgan and demonstrated the strength of the Kuwait economy. Certainly the said transaction will build up the market confidence of the local, regional and international market and at this stage we need more transactions like Burgan, a company with sound financials, strong cash flows and solid leadership.
Further, he mentioned - despite our short history of operations, we at Liquidity House have so far concluded three international syndicated facilities since the start of our operations in last November. This
demonstrates Liquidity House's capability and in particular KFH Groups commitments towards regaining market confidence to contribute to the success and promotion of Islamic banking.
Emad continued his speech - It's worth mentioning since last two decades KFH Group is committed for the growth of local economy and has been a keen supporter of "Oil and Gas" industry which is the main driver of Kuwait economy. KFH Group was involves in all the major initiatives which were originated from Kuwait in this space and also an active player for all major land mark deals in GCC.
David Testa, CEO of Gatehouse, noted that this was the first Shariah compliant Kuwaiti syndication this year and also Burgan's debut capital markets issuance. He credited the successful close of the transaction, in spite of the adverse market conditions, to the strong performance of Burgan who worked closely with the Initial Mandate Lead Arrangers. He also praised the diligence of the other Initial Mandate Lead Arrangers as well as thanking the participants for making this deal a resounding success
Rami Falah, Regional Head of Islamic Banking-ME for BNP Paribas, mentioned that ''BNP Paribas is very proud to take part in this transaction as a Mandated Lead Arranger, through its Islamic Banking arm Najmah, which was established in 2003 with the mission of providing Islamic finance solutions worldwide. This transaction is reflective of BNP Paribas' commitment to Islamic Banking and the region. It also shows that the collective ability of local and international banks to work together on such deals will assist in improving market confidence."
On a closing note, Mr Hamad Al Hamad mentioned that the success of the Facility was down to the team work and collaboration, and the keen and timely response of the lead arrangers, the participant financiers and the Law firms (Herbert Smith, ASAR and Clifford Chance).
- Ends -
For more information, please contact:
Liquidity House
Mohd Yusuf Chorghay
Senior Manager
Investment Banking
Tel: +965 2225 7610
Email: yusuf@liquidityhouse.com
Gatehouse Bank plc
Michael Clarke
Vice President
Capital Markets Origination
Tel: +44 20 3170 7322
Email: michael.clarke@gatehousebank.com
BNP Paribas
Ms.Lubna Forzley
Corporate Communications
Tel: +973 1786 6075
Email: Lubna.forzley@mideast.bnpparibas.com
© Press Release 2009
