KUWAIT: The Egyptian unit of Bahrain’s Islamic lender Al Baraka plans to issue a sukuk, or Islamic bond, to raise about up to $150 million next year, the chief executive of the group said on Sunday.
"We have not yet finalized (the issue) because we have to do the structure….for it from the Islamic point of view," Adnan Yousif told reporters on the sidelines of a conference in Kuwait.
He said Al Baraka’s Egyptian unit would use the funds to restructure its balance sheet and fund expansion.
Gulf Arab banks are trying to expand in Egypt, but the country’s Islamic finance industry is still in its infancy as its government fears it could give a boost to Islamists.
The head of the Egyptian Financial Supervisory Authority (EFSA) said in April that Egypt plans to issue its first regulations governing sukuk in the second half of this year.
Al Baraka group also has plans to issue a $200 million sukuk by year-end.
Sukuk are structured around underlying assets that generate returns to bondholders. The market is expected to recover over the coming months alongside fixed-income markets in the Gulf that were hit by Dubai’s debt woes and the European debt crisis.
