Majority state-owned Oman Telecommunications Company (Omantel) is seeking an approval from shareholders for a planned OMR50 million Islamic debt instrument or sukuk issue.
EGM on March 22
The company plans to seek approval for the sukuk issue at an extra ordinary general meeting (EGM) scheduled to be held on March 22. The telecommunication firm is working with its bankers to structure the sukuk, which include tenure of the issue.
A large number of local investors are interested in investing money in sukuk instrument.
A vibrant sukuk market in Oman will help Islamic banks to invest their excess funds in an effective manner. Both capital market debt instruments like sukuk and Islamic banks should grow side by side.
Traditionally, sukuk issues have a maturity of five years as investors look for long term tenure issues.
A special purpose vehicle (SPV) is also needed for raising funds by way of sukuk issue, which is asset backed. In Oman, Al Madina Financial and Investment Services was the first company to come out with a sukuk issue, which was for funding Muscat Grand Mall expansion (developed by Tilal Development Company).
Bank Muscat is another institution, which is planning a sukuk issue now. Also, Oman government has been talking about issuing a sovereign sukuk of OMR200 million this year for meeting budget deficit.
(Times Of Oman / 08 March 2015)---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com