KARACHI: The government has decided to generate funds through Islamic mode by reopening of Sukuk and in this regard the State Bank of Pakistan (SBP) issued necessary instructions and guidelines.
According to the details, the SBP said that subsequent to the issuance of first Ijarah Sukuk issue if the government is in need of additional funds and instead of issuance of a new Sukuk wishes to raise new funds by way of re-opening, then the State Bank of Pakistan will conduct an auction for reopening of the existing Sukuk Issue.
In the Islamic context the steps of reopening of existing Sukuk is similar as that of issuance of a completely new Sukuk i.e. at the time of reopening of Sukuk the transaction is concluded by purchasing additional share in the identified asset on Musha basis which is then given on rent/ Ijarah and a separate Ijarah Agreement is executed.
However, since the underlying asset, maturity date, rental rate and rental payout frequency is kept same as the initial issue, therefore the new issue would be called re-opening of Sukuk instead of a new Sukuk issuance.
The transaction flow for the re-opening of Sukuk would be same as that of an approved structure of the fresh Issue which is re-defined briefly in the following few lines:
At the time of reopening of Sukuk, a fresh Purchase Agreement would be executed between Pakistan Domestic Sukuk Company Limited (PDSCL) (on behalf of Investors) and GOP at an agreed purchase price for the purchase of a new/additional share in the asset.
Subsequently PDSCL (on behalf of Investors) and GoP would enter into an Ijarah Agreement wherein the new / additional assets would be leased to GoP for a fixed period which would be ending on the scheduled maturity date of the first issue.
The other agreements as mentioned in the Shariah Structure of first issue would also be executed simultaneously.
However, the structure of reopening of Sukuk might differ from the structure of the first issue in ways as elaborated below.
