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October 24, 2019

PSX approves Rs200bln energy sukuk listing


October 24, 2019

KARACHI: Pakistan Stock Exchange (PSX) on Wednesday approved listing of Pakistan Energy Sukuk-1 of Rs200 billion of Power Holding Limited under its privately-placed debt securities’ listing regulations.

“The said sukuk will be listed on the exchange w.e.f (with effect from) Thursday, October 24, 2019 and trading in the sukuk certificates will commence one day after the date of their formal listing i.e. Friday October 25, 2019 through bond automated trading system and will be selected through National Clearing System on T+1 settlement basis,” PSX said in a statement.

“Government debt securities which include GoP (government of Pakistan) Ijara sukuk can also be issued to individual investors and in accordance with the Pakistan Energy Sukuk Rules 2019, individuals shall be allowed to hold the sukuk issued by PHL (Power Holding Limited). The market lot will be one certificate of face value of Rs5,000 each.”

The redeemable capital instrument would help the government to raise funds to fulfill its financing requirements, including but not limited to settlement of part of prevailing circular debt related to energy sector.

Energy Minister Omar Ayub in May put the figures of circular debt at Rs450 billion. He told a media conference that the government wanted to bring it down to zero by the end of next year.

Sources said the bonds would help alleviate the liquidity crisis facing the energy sector and ease pressure on the companies to clear dues against purchases of petroleum products and liquefied natural gas. Power sector owes billions of rupees to oil and gas suppliers among other companies.

Six banks – mandated lead arrangers – committed to underwrite more than Rs190 billion for the subscription of the issue. The top lead arranger is Meezan Bank with underwritten commitment of Rs88 billion. Other lead arrangers for the Pakistan Energy Sukuk-1 include Faysal Bank, BankIslami Pakistan, Dubai Islamic Bank Pakistan, MCB Islamic Bank, and Al Baraka Bank Pakistan. Remaining nine billion rupees are to be raised from individuals.

For mandated lead arrangers, the face value of sukuk is Rs100,000. PSX said the availability period is up to one month from the signing transaction documents. The availability period would stand expired at the disbursement by the investors. The sukuk tenor is up to 10 years starting from the expiry of availability period.

Semi-annually in arrears, the first profit payment will fall due and payable at the end of the six months from the expiry of availability period till the expiry of the tenor. Profit will be calculated on the basis of actual number of days elapsed in a year on the outstanding facility amount of investors.

“The issuer will pay an additional amount calculated at 120 basis points per annum in case profit/rental payment is not paid within 30 calendar days of profit payment date,” the PSX said.

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