Monday 08 / July / 2024
Muscat: Majority state-owned Oman Telecommunication Company (Omantel) on Tuesday said that the company has received a no objection certificate from the Capital Market Authority (CMA) for its proposed sukuk or Islamic bond issue.
In this regard, Omantel has mandated Standard Chartered Bank as sole structuring advisor, and HSBC, National Bank of Oman and Standard Chartered Bank as joint placement agents to arrange investor discussions on its behalf starting January 11, the telecom firm said in a stock market filing.
Sukuk transaction is denominated in United States dollar and Omani rial subject to market conditions.
Earlier, Omantel had said the plan was to raise OMR50 million and the proceeds of the Islamic bond will be used for building the telecommunication company’s new headquarters. Omantel’s issue is the second corporate issue, after Tilal Development’s similar OMR50 million issue a couple of years ago.
An agency report said that the minimum subscription would be for OMR10,000.Traditionally, sukuk issues have a maturity of five years as investors look for long-term tenure issues.
Oman government’s sovereign sukuk issue of OMR250 million last year injected a confidence and a benchmark for corporate issuers. The issue was well received by institutional investors, especially banks.
Availability of more sukuk will also help to create a secondary market for the debt 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.
