Dar Al Arkan likely to issue $300 mln sukuk

Dar Al Arkan Real Estate Development Co. is expected to issue $300 million (SAR 1.13 billion) sukuk, CNBC Arabia reported, citing the company’s Chairman, Yousef Al Shelash.

The purpose of the issuance is to obtain long-term financing, and the proceeds will be used to finance current and future projects, Al Shelash said.

The final price of the issue will be determined following the book-building process, he said, adding that the yield will be closer to the company’s previous issues.

The sukuk will be allocated to the company’s large investor base across Europe, Asia, and the Middle East.

The sukuk will not carry any significant risk, thanks to Dar Al Arkan’s proven track record of 13 years, Al Shelash said.

He further noted that the company’s asset base exceeds SAR 28 billion and a capital of SAR 18 billion, adding that the company has a high exposure to the low-risk real estate sector.

As regards the Shams Al Arous project, he said it is semi-complete, and hopefully the promotion of the project is likely to kick start this year.

Yesterday, the company announced its intention to issue 7-year dollar-denominated fixed rate "RegS" Senior Unsecured Sukuk, Argaam reported.