Islamic bonds: Engro Corp plans Rs4b sukuk

DUBAI: Pakistani conglomerate Engro Corp plans to raise Rs4 billion ($40.9 million) through listed sukuk (Islamic bonds), Pakistan Credit Rating Agency Limited said. The sukuk would be secured and offered in two tenors – a three-year Rs3 billion tranche with a 13% profit rate and a five-year Rs1 billion tranche with a 13.5% profit rate, the rating agency said. The plan comes on the heels of a deal by K-Electric, which tapped the market in February to raise Rs6 billion through a three-tranche retail sukuk. Engro has issued sukuk before but on a much smaller scale as its fertiliser unit raised Rs2 million through a six-month deal through private placement in 2012. The company is involved in sectors including food, polymers, fertilisers and power generation. Islamic finance is expanding in Pakistan as a flurry of initiatives by regulators aims to develop the industry.

Published in The Express Tribune, April 25^th, 2014.

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