Trowers & Hamlins advises Sohar International Bank SAOG on Takaful Oman's debut Perpetual Sukuk Al Mudaraba Trust Certificate Issuance Programme


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International law firm Trowers & Hamlins advised its longstanding client Sohar Islamic, Sohar International Bank SAOG (Sohar International) - one of the leading investment banks in Oman - on its role as the sole dealer and issue manager, on the establishment by Takaful Oman Insurance SAOG's (Takaful Oman) of its debut Sukuk Al Mudaraba Trust Certificate Issuance Programme (Programme). The first Takaful company in the world to establish a programme of this kind.

Takaful Oman successfully issued the first series of Sukuk certificates (Certificates) under the Programme of OMR 6,000,0000 through Takaful Sukuk SPC, the special purpose company established by Takaful Oman for the Programme.

The net proceeds of the Certificates shall be applied by Takaful Oman to strengthen the quality of its capital and for its general corporate purposes.

The transaction is unique as it represents a first-of-its-kind perpetual Sukuk programme established by a Takaful company. Unfamiliarity with Mudaraba structures in the Oman Sukuk market and the way the deferment of profit payments are structured under the Programme added significant complexity to the transaction. The Certificates were admitted to trading by the Muscat Securities Market on the Bonds and Sukuk Market on 2 February 2021. 

Salman Ahmed, partner and head of Islamic finance at Trowers, who led the Trowers team along with Kuala Lumpur based finance partner Elias Moubarak commented: 

"We are proud to have advised Sohar International and supported Takaful Oman on this first-of-its-kind transaction.  Tremendous praise goes to Sohar International and Takaful Oman for devoting extensive time and energy to successfully close this transaction and for their readiness to tap the market during an incredibly difficult period of market uncertainty due to the on-going COVID-19 pandemic."

Elias Moubarak said: 

“It has been my privilege to continue the firm’s significant relationship with Sohar International and Takaful Oman. I am very pleased to have been involved in this landmark transaction which is another significant step in the development of the Sukuk market in Oman.”

Samir Hassan, Legal Counsel at Takaful Oman Insurance S.A.O.G commented by saying that this achievement marks the end of a long 9 months of continues group efforts aiming at the success of the sukuk transaction, he added: 

"It has been a great pleasure working side by side with the teams of Sohar Islamic and Trowers & Hamlins who showed exceptional professionalism, dedication, and extra ordinary expertise in all aspects related to the transaction without missing the tiniest detail." He hoped to extend this cooperation in future transactions and congratulated the parties for this success.  

Dr Sayyida Rawan Ahmed Al Said CEO at Takaful Oman Insurance S.A.O.G expressed her pleasure at this occasion and stated that: 

"The issuance of sukuk under the current international situation was a challenge in its own right, but we decided to be up to it, we together with our partners Sohar Islamic and Trowers & Hamlins were all willing to take this project right to the end. The issuance at this time illustrates the solidarity between all parties in the Omani economy and the trust investors have in us. Our sukuk were fully subscribed less than a week from subscription day. Likewise, Muscat securities market started 2021 with this new valuable listed instrument, perpetual sukuk issued by a Takaful company is the first of it’s kind globally. Looking forward, we at Takaful Oman thrive to take a leading position in the Omani insurance/Takaful sector, and will continue the sukuk project over the coming years. Finally, I take this opportunity to thank Takaful Oman’s shareholders and Board Directors for the unlimited support they provided for the success of the sukuk issuance, and to the team whom I worked with on this project at the company and also the teams at the issue manager led by Mr. Ahmed Al-Musalmi the CEO at Sohar International/Islamic and the issue legal advisors led by Mr. Salman Ahmed the partner and head of Islamic Finance at Trowers and Hamlins for their sincere efforts." 

Mr. Ahmed Al Musalmi, Chief Executive Officer, Sohar International, said: 

“With a strong purpose that puts winning at the heart of everything we do, Sohar International continues to deliver superior banking services showcasing our aspiration to bring the best international to Oman. As part of our strategic way forward plans, Sohar International has been pursuing more growth opportunities ultimately contributing positively to Oman’s economy and its diversification agenda. The Bank strives to bring new products offerings to the market and the current issuance is a testament to the same. The first of its kind transaction presented unique challenges in terms of execution; and couldn’t have been overcome without the guidance and support from the Trowers team. I would like to congratulate the board, management especially Sayyida Rawan Ahmed Al Said and the entire Takaful Oman team for the successful completion of this transaction."

The transaction was led out of Muscat by the Trowers team led by partner Salman Ahmed, with support from partners Elias Moubarak (Kuala Lumpur) and Jeremy Ingham (Bahrain). The partners were assisted by senior associate Nicol Ong (Kuala Lumpur), associate Aaron Ohm (Muscat) and trainee lawyers AlShaima AlHinai (Muscat) and Alyaqdhan Al Waily (Muscat). Trowers is recognised as a preeminent law firm in Oman. The firm has led the way in developing successful and innovative Sukuk structures for a diverse client-base in Oman. The firm acted on the first Sukuk issuance in Oman by Tilal Development Company in 2013 and has since acted on and developed novel Sukuk structures for: the Government of Oman on its debut Sukuk issuance, Meethaq Islamic Banking, bank muscat SAOG (Meethaq) on its and Oman's first ever domestic Sukuk programme, Tilal Development Company on its international Sukuk issuance, Maisarah Islamic Banking Services, Bank Dhofar SAOG on Omani conglomerate Golden Group's guaranteed and secured Sukuk programme and Maisarah Islamic Banking Services, Bank Dhofar SAOG on Omani conglomerate City Hotel LLC's Sukuk issuance.

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