K-Electric has launched a listed Sukuk of up to Rs. 25 billion for the period of seven years inclusive of Rs. 5 billion greenshoe option.
The Sukuk is secured, having a tenor of seven years and has been rated AA+ by VIS credit rating agency. It offers the rate of return of 3-month KIBOR plus 1.70% per annum, subject to a floor of 2% and a cap of 25% to comply with Shariah principles.
Out of the total Issue size of Rs. 25 billion, Rs. 23.708 billion has been successfully raised through Pre-IPO placement and Rs. 1.292 billion is being offered to the general public by way of Initial Public Offer. The Sukuk will be listed on Pakistan Stock Exchange.
The primary utilization purpose of the Sukuk proceeds is to fund routine operations and capital expenses requirements of the company. Bridge facility of Rs. 20 billion was availed earlier from HBL for the same purpose and has already been settled through pre-IPO proceeds of the Sukuk Issue.
The Sukuk will be offered in denominations of Rs. 5,000 or multiples thereof to the investors subject to a minimum investment amount of Rs. 5,000.
The Sukuk facility has been secured by:
A first charge over the Hypothecated Properties, in favour of the Sukuk Trustee or the benefit of Sukuk holders. The list contains a total of 50 grid stations that KE has identified as having a total valuation of Rs. 33.4 billion.
In 2015, after the tremendous success of the KE AZM Sukuk, KE launched the Sukuk-ul-Shirkah (Shirkat-ul-Milk), worth Rs 22 billion, out of which Rs. 7 billion was offered to the general public. The proceeds were utilized to prepay long-term loans to the International Finance Corporation and the Asian Development Bank.
KE with exclusive distribution rights for Karachi and its adjoining areas including Dhabeji and Gharo in Sindh and Hub, thal, Vindar and Bela in Balochistan is serving a population base of 22 million people. The Company has a diversified consumer base of over 2.91 million including industrial, commercial, agriculture and residential consumers.
