The deal, lead managed by Dubai Islamic Bank (DIB) and Barclays Capital, reflects the huge growing interest in Islamic finance by both Islamic and conventional institutions.
Faisal Mikou, a director at Barclays Capital (BC), is reported locally to have said that investors were attracted by the convertible sukuk’s indicative yield of 7.25% to 8.25%, which is some 250 to 350 basis points (bp) over a two-year Libor swap.
The issue is part of a large financing package for PCFC’s expansion projects. But the sukuk is not conditional on the completion of the $5.7bn all-cash bid in November by DP World, PCFC’s subsidiary, to buy Britain’s P&O, the world’s fourth-biggest port operator.
Putting P&O and DP World together is expected to create one of the top three leading ports groups in the world.
The $2.8bn deal in early December was also the first-ever convertible sukuk issue.
According to Dr Mohammed Khalfan bin Khirbash, chairman of DIB, it is convertible to 30% equity shares of the PCFC entities when they go for the initial public offering (IPO)
If the IPO does not take place then the yield on the sukuk will become more than 10% per year.
“The majority of the orders and expressions of interest received so far are from international institutional investors in addition to local and regional institutions and high net worth investors,” said Dr Khirbash.
“A number of private banks are placing their orders with DIB and BC and are subsequently selling the sukuk to their own private customers.”
Giampiero Fiorani, former CEO of Italian BPI, has been arrested in connection with the bank’s bid for Antonveneta, the Italian bank taken over by Dutch bank ABN AMRO. Giovanni Consorte, Unipol’s chairman, is also being investigated for his role in BPI’s attempts to acquire Antonveneta.
The Italian insurance group is currently involved in a controversial takeover battle for Banca Nazionale del Lavoro against Spanish bank BBVA. Bank of Italy’s conduct in both bids has been heavily criticised by local politicians and international commentators.
Analysts with rating agencies Standard & Poor’s and Moody’s have both referred to reputational damage done to the country by its central bank. The European Commission is investigating the Bank of Italy for the handling of such acquisitions. Antonio Fazio has refused to resign and, as The Banker went to press, remained governor of the Bank of Italy.
Roger Davis, head of Barclays UK banking, is leaving two years after taking the job of reviving the bank’s UK underperforming retail banking division. Barclaycard’s chief executive Gary Hoffman will replace Mr Davis, adding the bank’s UK retail banking operations to his responsibilities.
Morgan Stanley ended 2005 with a senior change of the guard: chairman Sir David Walker retired at the end of December. Sir David, who is considered one of the City’s leading figures, will be replaced by Jonathan Chenevix-Trench, who until recently oversaw the bank’s global interest rate and currency operations.
Sir David’s departure came after an agitated 12 months for the US bank, which saw the replacement of Philip Purcell with John Mack as chief executive.
Staff outside the boardroom are also moving on. Michael Tory, one of Morgan Stanley’s top bankers, is joining rival Lehman Brothers, while Dhiren Shah, head of technology banking, is leaving to become managing director of Greenhill & Co. It is believed that other resignations will follow, after the bonus season ends.
ARGENTINE SHUFFLE Roberto Lavagna, Argentina’s economy minister, has been ousted as part of a cabinet reshuffle. Mr Lavagna and president Néstor Kirchner previously clashed over a number of issues including inflation, the handling of debt restructuring, wage rises and the renegotiation of utility concession contracts.
Felisa Miceli, an economist and the president of the state-owned Banco de la Nación Argentina, will now fill the role. Mr Lavagna was considered the architect of Argentina’s three-year economic recovery, following its worst-ever financial crisis.
PAKISTAN FIRST
Pakistan has appointed Shamshad Akhtar as central bank governor and the first woman in this role. Ms Akhtar leaves her job as a director general at the Asian Development Bank in Manila. A challenge of her new job will be to contain inflation, which was 9.28% last year while Pakistan had economic growth of 8.4%.
There was panic on the Tokyo Stock Exchange in December, when Mizuho Securities mistakenly ordered the selling of 610,000 shares in J-Com, a recruitment company, at ¥1 each, while intending to sell one share for ¥610,000 ($5148). The error could cost the Japanese bank ¥27bn to settle.
BNP Paribas is acquiring 51% of Ukrisbbank, Ukraine’s fifth largest bank, in a deal considered to be worth $350m-$400m. The French bank fought off competition from Hungary’s largest bank, OTP, which is looking for further acquisition opportunities in Ukraine.
Dresdner Bank has invested in an $800m share placing for Russia’s Gazprombank, ahead of its initial public offering (IPO) in 2007, most probably in London. The placing of shares representing 50% of the current capital will finance Gazprombank’s capital increase prior to its IPO. Dresdner’s involvement in the placing is also likely to win the German bank the mandate for the listing.
