KARACHI: The Power Holding Limited (PHC) of Ministry of Energy issued Shariah-compliant Pakistan Energy Sukuk-II worth Rs200 billion for the power sector.
The public sector entity owned by the Ministry of Energy, Power Holding Limited (PHL), issued Sukuk worth Rs200 billion through Pakistan Stock Exchange (PSX) to address liquidity constraints being faced by the power sector according to a press release.
It was the first-ever debt issuance through book building in PSX’s history and the second issue of Sukuk by PHL which focuses to assist the government for overcoming the circular debt of power sectors besides other economic challenges.
The PES-II of Rs200 billion is Shariah-compliant security guaranteed by the Government of Pakistan, having a 10-year maturity with semi-annual profit payment for investors.
PSX Managing Director Farrukh H. Khan said that the Sukuk issue on PSX through the state of the art book building system was a watershed moment in the development in the debt market in Pakistan. The government, finance ministry and Securities Exchange Commission of Pakistan (SECP) were focused on developing the capital market and the latest issuance was an important step, he added.
The PSX managing director detailed, “Pakistan is finally following the globally accepted best practice of using a book building methodology to raise debt, which benefits both issuers and investors by bringing transparency and price discovery to the center of the debt raising process. The book building process through the Stock Exchange will benefit the issuer in that it will enable price and demand discovery. Furthermore, it will give access to a wide investor base which will enhance liquidity and secondary market trading.”
The press statement also read that the investors throughout Pakistan and abroad can buy or sell units of the Sukuk on the PSX BATS trading platform through a broker that will provide liquidity and investors will be able to buy or sell the Sukuk in line with their investment objectives.
In the long run, having a larger investor base will help the government to successfully raise funds from the market at the most competitive rates, it added.