The Federal Cabinet has rejected the summary submitted by the Ministry of Finance for mortgaging F-9 Park in Islamabad as an asset to back guarantee for issuance of Islamic denominated Sukuk bond, a national daily reported.
The ministry had forwarded a summary to pledge the landmark for a loan of Rs. 500 billion. Cabinet has also directed the Finance Ministry to place another asset, such as Islamabad Club or Islamabad Expressway, as a guarantee for launching the Sukuk bond.
The Ministry of Finance had said in its summary that the F-9 Park spanning over 750 acres had an estimated worth of Rs. 900 billion, and in the case of launching a bond, its rent was provided to buying investors.
They had argued that the Islamic Sukuk bond was a cheaper mode of financing, and in absence of such a bond to be used for financing, Pakistan will have to manage the budget deficit through domestic T-bills at 70 basis points higher.
An official of the ministry spoke to the media and said, “You as media persons are also responsible for this rejection of summary because you all have created media hype, and today, the cabinet did not listen to our arguments.”
The ministry lamented that they had spent nine months to arrive at this stage for issuance of the Sukuk bond. “The market possessed liquidity and there is ample chance to get an attractive deal at this juncture,” the newspaper report quoted ministry officials.
The issuance of the Sukuk bond was not only going to assist the government’s budgetary position, but it would have also worked towards promoting Islamic banking finance in the country, the officials said.