Agha Steel Industries Limited intends to raise Rs 2 billion green show option through Sukuk. Funds through the 500 million Sukuk will be used for the settlement of short-term financial facilities up to Rs. 1.5 billion and financing the company’s ongoing capital expenditure.
Profit will be given on a quarterly basis at the rate of 3 months KIBOR + 125 bps, with initial payment at the end of the three months from the first drawdown date. The principal bill will be paid on the 15th month from the date of issue.
The proposed Sukuk has been assigned the preliminary rating of A (Single-A) by the credit rating agency VIS. As per the rating agency, the instrument shall have a tenor of fifteen months from the first drawdown date, with a call option being available after one year.
The rating element developed in the security structure of this device includes a 25% margin on all current and future current assets of the company, including the first joint in-pass hypothetical charge, personal guarantees of the organization’s sponsoring directors, and current status. The company’s future fixed assets with closing charges and a 25% margin, VIS said.
In addition, Sukuk’s rating and behavior criteria depend on and apply to the expected improvement in the liquidity profile and leverage indicators, for which timely completion of the expansion plan is considered important. The promotion of rankings has also been taken into consideration.