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KE BOD approves issuance of Sukuk worth PKR 22 Billion including Green Shoe option of PKR 2 billion

June 25, 2014

K-Electric (KE) in its press statement has announced the approval of its Board of Directors for issuance of Sukuk of up to PKR 22 billion, including a green shoe option of up to PKR 2 billion. The in-principle decision was taken in a meeting held by the Board of Directors of KE in its meeting on 25th June 2014.

According to the press release, the issuance is subject to completion of all the statutory requirements, obtaining all regulatory approvals, including State Bank of Pakistan's approval for prepayment of foreign currency loan portion, and completing requisite corporate actions.

Elaborating this, the KE spokesperson stated, "The proceeds of SUKUK will be primarily utilized to pre-pay the existing long term debt to obtain benefit of improved pricing and extended maturity profile. In this way, the Sukuk will help in significantly reducing the borrowing cost with a positive impact on Company's profitability and cash flows. It will also help in promoting Islamic capital market in Pakistan."

The initiative of KE to issue Sukuk has attracted many investors earlier as well. The subject issue will also be a good opportunity for investors to earn a good rate of return on Shariah Compliant instrument.

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Source: Daily Messenger (Pakistan)

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