A $300 million Islamic financing based on the sale of platinum has been arranged for the medium-term requirements of an international bank by Saudi Arabia’s Al-Rajhi Banking & Investment Corporation. The name of the bank has not been disclosed. The financing was arranged by the London-based ANZ International Merchant Banking Group. The financing is a three-year deferred payment in six tranches and will be fully drawn down in January. The structure of the deal, which is based on Islamic principles, is that Al-Rajhi gives the international bank platinum for which the payment is deferred for three years. The bank then sells the platinum to a third party to raise its funds.
Fund activity at The International Investor (TII), the Kuwait-based Islamic investment organisation, is expanding. TII is to launch a Far East real estate fund in the first quarter of 1994 in co-operation with the Hong Kong office of Jardine Fleming. The fund is expected to raise between $50 million-100 million. TII closed an $85 million US real estate fund this year (MEED 13:8:93). TII’s UK real estate fund was due to close by the end of December at about £40 million ($59.6 million), TII chairman and managing director Adnan al-Bahar says. TII also launched two currency funds this year, a Kuwaiti dinar fund and a US dollar fund. The Kuwaiti dinar fund closed in December with a total KD 7 million ($21 million). The dollar fund is due to close by mid-January with a total of $10 million- 15 million, Al-Bahar says. He says that TII is developing a number of local and regional equity funds. In addition, he said that TII was interested in Islamic emerging markets and is looking closely at Egypt, Turkey and Lebanon.
The Arab Investment Company (TAIC) has approved its investment budget for 1994, following the annual board meeting in December. The Riyadh-based company says its equity participations will reach $200 million by the end of 1994, and loans and credit facilities will reach $700 million. Operating profits were $9.5 million for the first 11 months of 1993. TAIC, owned by 15 Arab governments, has an offshore banking unit in Bahrain and invests in Arab projects. Investments in two projects have been approved. The first is a 13 per cent equity participation in a phosphoric acid project in Jordan, equivalent to $8.5 million (see Jordan). The board also agreed to increase TAIC’s equity participation in the Syrian Arab Company for Hotels & Tourism to $225,000. TAIC plans to increase the operations of its Islamic banking unit at the company’s offshore banking unit in Bahrain.
Saudi American Bank (Samba) has been given the exclusive rights to market a direct equity investment fund for Morocco in Saudi Arabia. The fund is being set up by the Moroccan enterprise Omnium Nord Africain (ONA) and Salomon Brothers in New York (MEED 24:12:93, Morocco). The fund’s parameters will be a minimum of $50 million and a maximum of $200 million, and will be offered to both individual and institutional investors. Samba’s target is $50 million. The fund will be open until the end of 1994, with a first closing at the end of January. Most of the initial investment will be in private Moroccan companies, although many will be traded publicly in the future. Privatisation investments will be an important area of activity but not the exclusive one, fund management sources say.
Abu Dhabi has launched a $7,000 million civil action locally against 13 former Bank of Credit & Commerce International (BCCI) executives (see UAE).