The conclusion of the world’s largest Islamic financing transaction was announced in Riyadh on Monday by senior officials of Ettihad Etisalat and commercial banks of Saudi Arabia and other Gulf countries.
The move by the UAE’s Etisalat to enter the growing Saudi GSM market has generated the $2.35 billion Islamic transaction, The Arab News reported.
Addressing a press conference, Muhammad Hassan Omran, Etisalat’s president and CEO, said: “The $2.35 billion bank financing for Ettihad Etisalat Company, which has been awarded the second GSM license and the first 3G license in the Kingdom, is a significant milestone in the history of Islamic banking. Today we mark an historic event, a transaction that will go down in history and reverberate in the coming days throughout the international Islamic finance industry.
“This Murabaha transaction - a Shariah-compliant bank loan in two tranches - will partly fund the $3.45 billion license fees besides contributing to operational costs projected to be $1 billion during the company’s first year in business. The balance of the financing needs will be met through an initial public offer (IPO) of shares at a date to be announced next month.”
Referring to the financing transaction, Abdullah Sulaiman Al-Rajhi, chief executive officer of Al-Rajhi Banking and Investment Corporation (ARABIC), said: “It is a significant transaction with a very different experience in which ARABIC together with local and regional banks are also participating. We are working on a few other financing and loan syndication proposals.”
The transaction has been arranged by Samba Financial Group (the lead managers for the transaction), ARABIC, National Commercial Bank, Citigroup, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Bank Al-Jazira, Kuwait Finance House and Emirates Bank. (menareport.com)
© 2004 Mena Report (www.menareport.com)
