HSBC and SABB pull off landmark sharia-compliant deal in Indonesia

It has taken nearly two years, but Indonesian mobile telecoms operator Axis has secured $1.2bn of sharia-compliant financing. The deal is significant not only because of its size, but also because, for many of the players involved, it was their first dealing with sharia principles, presenting HSBC and its Saudi affiliate with a complex task.

by Edward Russell-Walling

Share the article

HSBC and SABB pull off landmark sharia-compliant deal in Indonesia

Top team (from left to right): Naif Alsudairy, global relationship manager, global banking, corporate and investment banking, Saudi British Bank; Fahad Alsaif, director, head of debt capital markets, global capital financing, HSBC Saudi Arabia; John-Paul Way, division head, global banking, Saudi British Bank; Muhammad Farhan, director and head of Islamic finance, HSBC Saudi Arabia; Mona Altawil, associate director, investment banking finance, HSBC Saudi Arabia; and Rajiv Shukla, managing director and head of global capital financing, HSBC Saudi Arabia

As Islamic finance continues to extend its boundaries, Indonesian mobile telecoms operator Axis has laid down a few more milestones with its recent multi-tranche $1.2bn financing. This was the largest-ever sharia-compliant deal in Asian telecoms and the biggest in Indonesia’s private sector. It was also the first Islamic outing for Sweden’s export credit agencies, as well as for China Development Bank.

Axis, which received its licence in 2008, is owned by Saudi Telecom Company (STC) and Malaysia’s Maxis Communications, in which STC also has an indirect interest. STC recently upped its Axis stake from 51% to 80% and now fully consolidates the firm’s results, which included a doubling of revenues in 2010.