Firms hired to act for Virgin Mobile Middle East on pre-IPO Sukuk

Jersey-based firms VG and Ward Yates acted in partnership with the Dubai office of Dentons to advise Virgin Mobile Middle East and Africa (VMMEA) on the issuance of a $30 million pre-IPO exchangeable senior secured Sukuk

The company plans to use the proceeds to fund growth and expansion.

Ward Yates advised as Jersey and BVI counsel, while VG acted as corporate services provider to the special purpose vehicle (SPV) issuer.

Dubai-based VMMEA, a mobile virtual network operator, has been in the region since 2007. The company has two consumer brands, Virgin Mobile and FRiENDi Mobile, and operates in the UAE, Saudi Arabia, South Africa, Oman and Malaysia.

Arqaam Capital acted as the lead arranger and book runner, while BNY Mellon acted as the Delegate and Minhaj Advisory acted as the Shariah Advisor.

The proceeds of the Sukuk were utilised to purchase airtime vouchers and the structure includes novel redemption features and an option for investors to exchange the Sukuk for shares in VMMEA in the event of an initial public offering. Credit enhancement included a financial covenant package and certain security in favour of the investors.

“We are seeing increasing interest in corporate Sukuk structures, with Jersey being an attractive jurisdiction for transactions of this kind. We have many years of experience of acting as the glue in the middle of such deals, working with advisors and clients across many regions to help make them happen, and this transaction is a really exciting development,” said Trevor Norman, Director of VG’s Islamic Finance team.

Dentons Debt Capital Markets partner Alex Roussos added the firm was pleased to have worked with VMMEA and Arqaam on this landmark transaction because it's a fairly novel instrument for the region, having only had a handful of Pre-IPO Sukuks. It's the first one using an airtime structure and also involved putting in place security in favour of investors in various jurisdictions.