KARACHI (December 28 2006): Dubai Islamic Bank (DIB) has announced that it has arranged sale of 'Sukuks', or Islamic bonds, worth $85.3 million for two companies in Pakistan, namely, Karachi Shipyard and Engineering Works (KSEW), and Sui Southern Gas Company (SSGC). An announcement to this effect was made in a statement issued here on Wednesday.

It pointed out that Saad Zaman, Chief Executive Officer of DIB, Pakistan, and Deputy CEO of Millennium Capital, said: "DIB will sell Rs 4.2 billion of Islamic bonds to Karachi Shipyard and Engineering Works, and Rs 1 billion of Islamic bonds to Sui Southern Gas.

"Karachi Shipyard's bonds will be sold in instalments, with the first phase floated in early 2007." He added: "DIB is seeking to play a major role in attracting investment from the Gulf countries into Pakistan, particularly in the critical sectors of ports, shipping and real estate."

The KSEW Sukuk will be used to finance the upgradation and modernisation of the shipyard and will have the special feature of reserve eligibility for Islamic banks. Other than Wapda Sukuk issued early 2006, KSEW Sukuk will be the only reserve eligible instrument/security which will go along a way in the growth and development of the Islamic banking in Pakistan.

The Sui Southern Gas Sukuk will be used to finance expansion in the energy exploration area. DIB also participated in the two Sukuks issued by Sitara Chemicals, worth Rs 1.725 billion/$28.3 million for the expansion of the existing chemical plant and setting up of in-house power generating facilities.

Copyright Associated Press of Pakistan, 2006