World’s First Mega Islamic Marine Fund Launched
Asian Finance Bank Berhad and AmanahRaya Investment Bank Limited Labuan Set To Attract International Maritime Players With RM1 Billion Offering
KUALA LUMPUR --- Asian Finance Bank Berhad (AFB) and AmanahRaya Investment Bank Limited Labuan (ARIBL) have today entered into an Islamic Forward Binding (AFB-i) transaction and a memorandum of understanding to jointly establish, sponsor, manage and administer an Islamic Marine Fund with an expected USD250 million to be raised in the exercise.
AFB is a full-fledged Islamic bank backed by a consortium of leading Middle Eastern investors namely Qatar Islamic Bank (70%), RUSD Investment Bank Inc of Saudi Arabia (20%) and Global Investment House of Kuwait (10%), while ARIBL is a wholly-owned subsidiary of Amanah Raya Berhad that has been granted an offshore banking licence by Labuan Offshore Financial Services Authority (LOFSA).
In a joint statement issued today, the banks said AFB-i is a contractual obligation by two contracting parties to pay, on a forward value date, the price of commodity purchased on transaction date in order to facilitate the exchange of currencies between the two contracting parties.
The transaction is based on the shariah contract of Bai Muajjal, in which the bank’s customer purchases assets with a deferred payment on a specific time in the future and the delivery of the assets on spot basis.
“For AmanahRaya, this transaction is important in order for us to book in future foreign currency receivables at a favourable exchange rate as part of the hedging mechanism,” explained Tan Sri Datuk Arshad Ayub, Chairman of ARIBL.
Although there are Islamic hedging instruments in the market, AFB-i is the first such product to adopt the Bai Muajjal principle.
“We are very pleased to have this opportunity to work with a strong partner like AmanahRaya to launch an innovative product like AFB-i,” said Mr Faisal Al Showaikh, CEO of AFB.
AFB and ARIBL also sealed the understanding to develop an Islamic Marine Fund to invest in completed and non-completed marine vessels covering dry bulk carriers, tankers, anchor handlers, crew boats, equipment barges and other support vessels for marine activities, both on the local and international arenas.
The Islamic Marine Fund is designed as a “core plus” marine fund, investing in performance-proven vessels that show characteristics for capital and income enhancement through re-deployment strategies.
It endeavours to achieve medium to long term stable income and capital growth by acquiring high quality and income generating marine vessels backed with charters from major oil companies and credible operators.
The fund is full-fledged investor-managed based on the Ijarah-backed structure, the first of its kind and is expected to generate an internal rate of return (IRR) of 12-15 per cent.
Maritime captain of industry with decades of shipping experience, Datuk Abdul Latif Abdullah from Penang Port Sdn Bhd, has been appointed Chairman of the Islamic Marine Fund.
“The Islamic Marine Fund will provide opportunities for institutional and sophisticated retail investors globally, to participate and take advantage on the growth of the marine sector. Through this fund, investors will have access to a diversified portfolio of Shariah compliant marine vessels that could potentially generate attractive medium to long-term returns,” said Datuk Abdul Latif.
“The investment objective is to assemble a portfolio of quality ocean-going as well as coastal vessels operating within Malaysian waters as well as worldwide,” added Mr Faisal Al Showaikh.
“This fund, is indeed the first of its kind in Malaysia and the region, and it is reflective of AFB’s objective to introduce new Shariah compliant products. We further plan to leverage on our ready access to the GCC market to bring in Middle East investors into this fund,” Mr Faisal said.
“The fund will be of a ten-year tenure, extendable for two periods of one year each and is targeted to raise up to USD250 million to finance the purchase of the first identified initial fleet. We are working closely with the technical adviser to identify good potential fleets to purchase,” he added.
Signing on behalf of ARIBL was its Director Datuk Mohamed Azahari Kamil while AFB was represented by its CEO Mr Faisal Al Showaikh. Also present were Amanah Raya Berhad Chairman Datuk Dusuki Hj Ahmad, Amanah Raya Berhad Group Managing Director Datuk Ahmad Rodzi Pawanteh, and AFB Director Mr Fouad Hayel Saeed. A roadshow to the Middle East to promote the Islamic Marine Fund has been planned. |
