K-Electric raises Rs25bn in Sukuk offering

K-Electric on Monday announced the successful closure of its Rs25 billion Sukuk, which is the largest Sukuk issue in the private sector of Pakistan. 

With oversubscription of IPO portion of Sukuk by almost 2.5 times, the power utility was able to close the Sukuk subscription on 3rd August 2020, more than two weeks ahead of schedule. 

“This is a testament to continued investor confidence in K-Electric’s robust investment plan under which $2 billion will be spent across Karachi’s energy value chain over the next three years; including the establishment of a 900MW state-of-the-art RLNG-fired power plant and downstream transmission and distribution upgrades,” said a statement issued by KE. 

“Supported by timely regulatory and governmental approvals, these investments will shift Karachi into a power surplus position through the addition of close to 2,100MW additional power supply by 2023.”

Out of the targeted Rs25 billion, KE had earlier raised Rs23.7 billion via a pre-IPO (Initial Public Offering). The remaining amount (Rs1.3 billion) was offered through IPO to the general public, with a minimum subscription of Rs5,000 per certificate. 

With a seven-year tenor, inclusive of a two-year grace period and a AA+ accreditation from the VIS Credit Rating Company Limited, the issue offers a lucrative return to its investors. 

Listed on the Pakistan Stock Exchange, the Sukuk will provide a trading platform for investors during the life of the instrument, with Arif Habib Limited acting as the market maker and consultant to the issue. 

The structure of the Sukuk has been approved by an independent Shariah Advisory Board. Habib Bank Limited and National Bank of Pakistan are the structuring agents for the Issue.