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Tuesday, 20 March 2012

Sudan eyes up to $1.5 bln with pipeline-backed sukuk

KHARTOUM (Reuters) - Sudan aims to raise $1 billion to $1.5 billion this year with Islamic "sukuk" bonds that offer stakes in an oil pipeline, a move the African country hopes will draw more Gulf Arab investment to its debt market, a senior official said on Monday.

Sudan Financial Services Co., which issues Islamic bonds on behalf of the government, wants to offer the dollar-denominated sukuk within two months, General Manager Azhari Eltayeb Elfaki told Reuters.

The debt agency is also preparing to issue sukuk that will be repaid with profits from gold exports and which investors will be able to buy in foreign or local currency, he said.

Sudan lost about three quarters of its oil output when South Sudan seceded in July, aggravating a foreign currency shortage, budget gap and high inflation in the north.

Depreciation of the Sudanese pound on the black market has dampened demand for debt denominated in local currency, raising the appeal of debt issued in foreign currencies.

"Now, inshallah (God willing), we are going to make sukuk for the pipeline," Elfaki said in an interview, referring to an oil pipeline running from oil fields including Heglig to a Red Sea terminal at Port Sudan.

"Now they (the finance ministry) are making the technical studies and the evaluation of the pipeline itself. I think they will finish it, inshallah, by the end of this month."

Elfaki said he expected the sukuk to draw mostly investors from Gulf Arab states like Saudi Arabia and would total $1 billion to $1.5 billion.  

(Reuters / 19 March 2012)

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