GFH Financial Group's Strategic Sukuk Issuance Plan
GFH Financial Group unveils ambitious plans for a $500 million Sukuk program to strengthen its financial strategy.
Summary
GFH Financial Group has announced a $500 million Sukuk issuance program, aiming to enhance its financial strategy. The plan includes modifications to existing Sukuk terms and a delegation of powers to the Board for execution.
GFH Financial Group B.S.C., a prominent name in the GCC financial sector, has recently announced the outcomes of its Ordinary General Meeting, revealing a strategic plan to bolster its financial standing through a new Sukuk issuance program. This move underscores GFH's commitment to leveraging Islamic finance instruments to drive growth and stability.
The meeting, chaired by Mr. Hisham Alrayes, witnessed a 39.14% quorum and approved several critical agenda items. Among them, the most noteworthy is the Board of Directors' recommendation to establish a trust certificate issuance program, popularly known as the Sukuk Program, valued at up to USD 500 million. This ambitious initiative will be executed through a Special Purpose Vehicle (SPV), contingent upon obtaining the necessary regulatory approvals.
The shareholders have also sanctioned the issuance of Sukuk amounting to USD 500 million, which could be executed in one or more tranches. This strategic move is anticipated to enhance GFH's capital structure, providing a robust platform for future investments and expansions.
Additionally, the meeting addressed modifications to the terms of the existing USD 500 million Sukuk, which are due in 2025. Originally issued in two tranches in 2020, these Sukuk certificates are now eligible for early redemption, offering flexibility to both the issuer and investors.
Furthermore, the Board of Directors has been empowered to undertake necessary procedures to implement the Sukuk Program and related offers. This includes securing all requisite approvals from regulatory bodies, finalizing agreements, and executing any actions deemed essential in alignment with the program's objectives.
From an investment perspective, the strategic direction taken by GFH Financial Group is a positive signal. The Sukuk issuance not only reflects the company's proactive approach to managing its financial resources but also its dedication to adhering to Islamic finance principles. Investors may find this an opportune moment to consider a 'buy' position, given the company's demonstrated commitment to growth and financial prudence.
Source
Summary
The ordinary general meeting of GFH Financial Group B.S.C. was held on October 9, 2024, via visual communication, chaired by Mr. Hisham Alrayes. The meeting achieved a quorum of 39.14% attendance. During the meeting, several resolutions were approved: 1. The minutes of the previous meeting from March 24, 2024, were approved. 2. The Board's recommendation to establish a Sukuk Programme valued at up to USD 500 million through a Special Purpose Vehicle (SPV) was approved, contingent on obtaining necessary regulatory approvals. Shareholders also approved the issuance of Sukuk up to USD 500 million in one or more tranches. 3. Modifications to the terms and conditions of the existing USD 500 million Sukuk due in 2025 were approved, including an offer for early redemption of the outstanding certificates. 4. The Board of Directors was authorized to undertake necessary actions for executing the Sukuk Programme and Offer, which includes obtaining regulatory approvals, concluding agreements, and performing essential actions as per the agreements related to the Sukuk Programme and the Offer.
