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our correspondent
Saturday, March 23, 2013
From Print Edition
 
 

 

KARACHI: The State Bank of Pakistan (SBP) on Friday announced that the proceeds of the government of Pakistan Ijara Sukuk will be used by Pakistan Domestic Sukuk Company Limited (PDSCL) to purchase the assets as an agent for and on behalf of the investors.

 

The State Bank will conduct an auction through which Sukuk investors will be identified.

 

A circular issued by the State Bank said that the investors will execute the Sukuk subscription undertaking in favour of Pakistan Domestic Sukuk Company Limited and the National Highway Authority (NHA), which will record the commitments of the investors to subscribe the Sukuk to be issued by PDSCL.

 

Under the Sukuk subscription undertaking, the investors will also appoint Pakistan Domestic Sukuk Company Limited as their agent. Each such Sukuk will represent an undivided ownership in the assets, it said.

 

A Sukuk issuance undertaking will be executed by Pakistan Domestic Sukuk Company Limited and NHA in favour of the investors, whereby, PDSCL will undertake to issue the Sukuk to the investors.

 

The circular said that Pakistan Domestic Sukuk Company Limited, acting as agent for and on behalf of the investors, will enter into a purchase agreement with the government, acting through NHA, for the purchase of undivided transaction structure of domestic Ijarah Sukuk ownership in the assets at an agreed price equivalent to the Sukuk issue amount.

 

Such purchase will be affected by a proper offer and acceptance between Pakistan Domestic Sukuk Company Limited and the government, it said.

 

Pakistan Domestic Sukuk Company Limited as the agent for and on behalf of the investors will collect the purchase price from the investors in its bank account and subsequently transfer the purchase price to the seller’s bank account, it said.

 

Each time there is an additional requirement of funds by the government, Pakistan Domestic Sukuk Company Limited will purchase an additional undivided share (explicitly determined and expressed in terms of percentage ownership) in the assets and purchase of such undivided share will be clearly reflected in each purchase agreement.

 

The circular also said that pursuant to the purchase agreement, ownership of the purchased share in the assets will be transferred to Pakistan Domestic Sukuk Company Limited and the registered title will remain with NHA.

 

The Pakistan Domestic Sukuk Company Limited and the SBP’s Banking Services Corporation will execute an agency agreement, whereby, PDSCL will appoint SBP BSC as the paying agent, reference agent and registrar for the investors, it added.