Herbert Smith has advised the Dubai-based Millennium Private Equity on the first Sukuk financing for a UK corporate. In an evolution for the Sukuk markets, Millennium Private Equity has used the Sukuk as a tool to implement a private equity investment in International Innovative Technologies (IIT), a manufacturer of industrial milling machines in North East England.
This is the first Shari’ah compliant issuance to take advantage of the alternative finance investment tax rules that have been introduced over the last few years in the UK to provide Islamically compliant financial products with a level playing field to that of their conventional counterparts. The Sukuk was based on a musharaka structure, modified to enable the investor take up an option to take a stake in the business of IIT. The issuance represents a significant milestone for a number of reasons and is set to lead the way in venture-backed Islamic financings enabling Islamic investors to utilise Sukuk instruments as a means to take up investment opportunities in a wide range of sectors.
The Sukuk is listed on the Cayman Islands Stock Exchange, pays a profit based coupon of 10% a year and will mature in 2014.
The Herbert Smith team was led from Dubai by the head of the firm’s Islamic finance group Nadim Khan and London-based head of tax Bradley Phillips. Nadim and Bradley were supported by a team comprising of Dubai and London based lawyers Robert Davy, Perminder Gainda, Victoria Mesquita and Kunal Mehta. Additional support was provided by London-based partner Thiha Tun.
Nadim Khan commented:
“We are delighted to have been able to assist our long standing client, Millennium Private Equity, on the structuring and execution of this landmark transaction. This is an important transaction not only because it leads the way for other United Kingdom corporates to consider tapping the Islamic capital markets but, also because of the flexibility offered by the structure enabling the Sukuk to be used as a private equity investment tool. We look forward to seeing a number of similar such transactions in the United Kingdom given the successful launch of this one.”
Related Posts:
- None Found