Sukuk Al Istithmar: Shariah Requirements, Case Study: Saudi Electricity Company

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1. SUKUK AL-ISTITHMAR AAOIFI The term (including rights under is therefore sometimes contracts and or receivables) can be packaged together and sold sukuk. Shari’ah Requirements Applicable to the Underlying Al-Istithmar The Shari’ah requirements: assets. 22 Latham & Watkins | The Sukuk Handbook: A Guide To Structuring Sukuk
2. CASE STUDY : SAUDI ELECTRICITY COMPANY SAUDI ELECTRICITY COMPANY ( SAR4.5 BILLION SUKUK AL-ISTITHMAR EXPIRING 2054G Reserve Collection Account Balance Periodic Distribution Amount (4) Net Income Saudi Electricity Company (as Issuer and Purchaser) Saudi Electricity Company (as Issuer and Sukuk Assets Manager) Saudi Electricity Company (as Issuer and Seller) Purchase Undertaking/ Sole Undertaking Sukuk Assets Substitution Undertaking Purchase Price Sukuk Assets Transfer Agreement Original Sukuk Assets (1) Sukuk Proceeds Assets Collection Account Periodic Distribution Amount Saudi Electricity Company (as Sukuk Administrator) Sukuk Assets Net Income (2) Sukuk Assets Management Agreement Sukukholders’ Agent Sukuk Redemption Amount Periodic Distribution Amounts Periodic Distribution Amounts Sukuk Proceeds Sukukholders 1 Fees) ted to the Collection Account en rve 2 3 4 The Issuance of Sukuk: issuer. Purchase of Assets: services from SEC’s residential and commercial customers. Accrual of Income: agreed to provide certain services in respect of the sukuk assets. The sukuk administrator’s responsibilities include accumulating all monies (net of certain fees) accruing under the sukuk assets (the net income). The Latham & Watkins | The Sukuk Handbook: A Guide To Structuring Sukuk 23
3. Purchase Undertaking : the aggregate nominal amount of the sukuk outstanding if purchased on the periodic distribution date falling This therefore ensures that the sukukholders’ agent receives 100 percent of the aggregate nominal amount of outstanding. the event that the relevant reserve requirement is not met. Additional Latham & Watkins Experience with Sukuk Al-Istithmar Power and Water Utility Company for Jubail and Yanbu (MARAFIQ): Latham & Watkins advised HSBC Saudi Saudi Electricity Company: Latham & Watkins also advised HSBC Saudi Arabia Limited and Samba Capital placement of a SAR7 billion 2025). Saudi Orix: 24 Latham & Watkins | The Sukuk Handbook: A Guide To Structuring Sukuk