Government-Backed Pakistan International Airlines Sukuk-I Raises PKR 5.7 Billion for Working Capital Requirements

Pakistan International Airlines (PIA) has raised PKR 5.7 billion on the 15th of July 2021, with the conclusion of the book building process for PIA Sukuk-I, according to local media reports. Although the book building process was conducted for an issue size of PKR 20 billion, including a greenshoe option of PKR 5 billion, due to underwhelming response from investors, the Sukuk issuance was limited to PKR 5.7 billion by Pakistan’s Ministry of Finance and PIA.

Why it Matters?

The government-backed issuance is Pakistan’s first corporate Islamic bond of 2021, and goes towards the statutory liquidity requirement of investment entities. Proceeds of the Sukuk issuance will be used by PIA for its permanent working capital needs, as well...