Saudi Arabia’s Capital Markets Authority has approved plans by the National Shipping Company of Saudi Arabia (Bahri) to issue its debut sukuk (Islamic bond). The size, terms and timing were not released.

Reuters reported in March that Bahri was planning a 10-year sukuk worth SR3.9bn ($1bn) to repay debt and for general business purposes. The arrangers are expected to be the Saudi branch of London-based HSBC, US-based JP Morgan, and Samba Capital, the investment banking arm of the local Samba Financial Group.

It is likely to be issued before Ramadan, expected to fall between mid-June and mid-July, when business activity slows.

The company reported profits of SR533m in 2014, down 29 per cent on 2013 profits. It had assets of SR1.8bn at the end of 2014.

Bahri is 22 per cent owned by the Saudi government’s Public Investment Fund, and 20 per cent by Saudi Aramco Development Company. The remaining shares are traded on the Saudi Stock Exchange (Tadawul).

Bahri is solely reponsible for transporting Saudi Arabia’s oil to foreign customers, after its acquisition of Aramco’s marine arm, Vela International, for $1.3bn in cash and shares in 2012.

Bahri signed a deal with South Korea’s Hyundai Samho Heavy Industries for five very large crude carriers (VLCCs) on 21 May 2015. The contract is rumoured to be worth $1bn.