KARACHI: Karachi-based utility K-Electric (KE) on Friday completed the sale of Rs22 billion Islamic bonds or sukuk to refinance existing debt and fund future investments in a latest transaction in the country’s buoyant Islamic debt capital market, the company said. “The company expressed its pride in announcing that the KE sukuk issue of Rs22 billion, including a green shoe option of Rs2 billion, has been fully subscribed on its launch day,” the utility said in a statement. “It is the largest listed sukuk issue in Pakistan’s corporate history and will offer investors lucrative value for their investment.” The interest rate was not specified, but the statement said the sukuk will also be listed at the Karachi Stock Exchange in June 2015. It is the second local currency sukuk from the K-Electric. In February, the utility raised Rs6 billion though a three-tranche sukuk, investment certificates which follow religious principles. The latest sukuk by the power utility has a tenor of seven years and is rated AA+ by the JCR-VIS Credit Rating Agency Limited. The statement said the strategic initiative will have far-reaching benefits for the KE in executing its long-term business strategy. “Future investment plans of the company include investing in generation capacity, addition and efficiency improvement, along with augmentation of the transmission and distribution network, improving system reliability and execution of loss reduction projects,” it added. The statement said the KE management hailed its stakeholder for their continued trust in the company, stating that the “subscription of sukuk on the day of launch clearly reflects confidence and trust of retail and institutional investors in KE as an entity, its professional management and its sound growth strategy.” “The KE believes that this issue of sukuk will pave way for the development of capital markets for Islamic Instruments,” it added. Issuance of corporate sukuk is gathering pace, helping broaden country’s Islamic capital market, which in recent years has relied on the government for the bulk of such deals,” it said. The capital market regulator also had recently framed rules for the issuance of sukuk as part of efforts to strengthen governance and broaden their appeal to investors. The current pipeline of sukuk includes Pakistan Mobile Communications (Mobilink), Treet Corporation Limited and BankIslami Pakistan.
