Al Busaidy Mansoor Jamal & Co.

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Banking and Finance

AMJ advises on US$728mn Salalah Methanol financing

Filed under AMJ Deals, AMJ News, Banking and Finance

Salalah Methanol financing

AMJ recently acted as Oman legal counsel advising a syndicate of international, regional and local financial institutions on the US$728 million project financing of the Salalah ammonia project which closed in August 2017.

The 12-year facility was partly used to refinance the existing debt of Salalah Methanol Company, a wholly-owned subsidiary of Oman Oil Company, with the remaining US$443 million allocated to develop a new ammonia plant in Salalah.

Clifford Chance acted as international counsel for the lenders group which comprised of a syndicate of 12 lenders led by Standard Chartered Bank.

The AMJ team was led by Marcus Pery, banking and finance partner, with support from senior associate Andrew Coddington. Commenting on the transaction, Marcus Pery said: “There was a very strong appetite for the financing of this project from both local and international institutions and we are delighted to have assisted in helping the transaction to reach financial close within a relatively short period of time.”

AMJ advises Bank Muscat on US$525 million term facility

Filed under AMJ Deals, AMJ News, Banking and Finance

Bank Muscat  US$525 million term facility

AMJ has advised Bank Muscat, Oman’s largest bank by assets, on a three-year term loan facility of US$525 million with a consortium of 12 relationship banks which closed on March 8. Part of the proceeds of the loan, which was coordinated by Bank ABC and National Bank of Abu Dhabi, will be used to refinance the bank’s existing term loan of US$600 million which the Bank raised in 2014. The remainder will be used for project financing and general corporate financing.

Bank ABC and National Bank of Abu Dhabi PJSC acted as Joint Coordinators and Mizuho Bank as Facility Agent. The Bookrunners and Mandated Lead Arrangers of the term loan facility were Australia and New Zealand Banking Group, Bank ABC, The Bank of Tokyo-Mitsubishi UFJ, Commerzbank Aktiengesellschaft, Credit Agricole Corporate and Investment Bank, Emirates NBD Bank PJSC, ICBC, Mizuho Bank Ltd, National Bank of Abu Dhabi, Sumitomo Mitsui Banking Corporation, and Wells Fargo Bank. Landesbank Baden-Württemberg joined as a Mandated Lead Arranger

The transaction was subscribed 1.5 times. According to AbdulRazak Ali Issa, Chief Executive, “The strong response by the participating banks reflects the positive outlook on the Sultanate’s economic development [..and] underscores the confidence in the bank’s financials in the prevailing economic situation.”

Marcus Pery, banking and finance partner, led AMJ’s team. Linklaters LLP, UK acted for the Arranger and the Agent

AMJ partners Islamic Finance Oman Forum 2017

Filed under AMJ News, Banking and Finance, Capital Markets, Islamic Banking and Finance

Mansoor Malik IFN

AAMJ partnered the Islamic Finance News in staging a successful second Oman Forum and Dialogue at the Grand Millennium, Muscat on March 7. The day-long event gathered over 150 industry players, legal experts and stakeholders from across the Middle East, Europe and Asia in an audience with the regulators to discuss trends in Oman’s fast-growing Islamic finance industry.

In the opening keynote address H.E Abdullah Salim Al-Salmi, executive president of the Capital Market Authority (CMA) announced that two private sector sukuk programmes totalling OMR 300million (US$ 780million), have received initial approval from the CMA. These sukuk programmes are the ‘first of a kind’ under Oman’s new sukuk regulation and come as the government is contemplating a second international sovereign issuance.

In a second keynote, H.E Hamoud Sangour Al Zadjali, the executive president of the Central Bank of Oman (CBO) expressed satisfaction with the pace of development in the Islamic finance segment. In the short span of four years, the combined assets of Oman’s Islamic banks and windows had reached OMR 3billion, representing a 10% market share, by the end of December 2016.

AMJ’s managing partner, Mansoor Malik, shared his insights on Islamic finance regulatory frameworks in two expert panel sessions. He stressed the need for the industry and regulators to embrace alternative investment products in order to maintain the positive growth trajectory of the Shariah compliant segment and create a vibrant and sustainable market. Malik recently advised on the Sultanate’s international US$500 million sukuk, which was privately placed and settled on 14 July 2016, as well as the sovereign’s debut sukuk and preceding corporate sukuk, the first of its kind in Oman.

AMJ’s banking partner, Marcus Pery, participated in the Forum’s closed-door dialogue on developing Oman’s Islamic financial markets, between industry experts and CMA and CBO representatives. Senior associate, Asad Qayyum delivered a workshop to students on legal and regulatory issues in Islamic finance.

For more information, contact Bernadette Bhacker-Millard

AMJ partners the Islamic Finance News

Filed under AMJ News, Banking and Finance, Capital Markets, Islamic Banking and Finance

IFN Oman Dialogue and Seminar

AMJ partnered the Islamic Finance News, a leading online industry journal, in organising the inaugural IFN Oman Seminar and Dialogue 2016 in Muscat earlier this year. The event brought together around 170 industry leaders, banks, investors, issuers, legal experts and other key stakeholders in the Islamic finance industry in Oman and the UAE to discuss the future of Islamic Finance in Oman and its role in diversifying the economy of the country.

Strongly supported by the regulators, the seminar opened with a keynote address from Hamoud Sangour Al Zadjali, the executive president of the Central Bank of Oman (CBO), in which he highlighted the successes of Oman’s Islamic financial institutions in achieving, within a short span of three years, OMR2.25 billion (USD582.25 billion) in gross assets and a market share of 7.75 per cent as of December 2015. Overall, Islamic banks and window operations are expected to ramp up market share to 10 per cent of the banking industry by 2018.

Featuring a series of panel discussions, case studies and presentations, the event highlighted the opportunities available in the fast-growing Omani Islamic market for both capital-raising and investment. AMJ’s managing partner, Mansoor Jamal Malik took part in a panel discussion on recent developments shaping Oman’s Islamic Capital Markets in which he summarised the current regulatory and legal framework for structuring Shariah-compliant transactions. Senior associate, Asad Qayyum, participated in a closed afternoon session of experts to discuss a roadmap for the further expansion and development of industry in Oman.

AMJ has also entered into an exclusive media partnership with the IFN’s Islamic Finance Corporate, a new monthly e-newsletter dedicated to promoting Oman’s Islamic Finance.

For more information, contact Bernadette Bhacker-Millard

New SME definition may relieve pressure on bank lending target

Filed under Banking and Finance, Central Bank of Oman, News, SMEs

Central Bank of OmanOman’s banking regulator, the Central Bank of Oman (CBO) has been at the forefront of promoting policies which facilitate access to finance for the nascent SME sector in the country. Initiatives include a regulation mandating banks to allocate a minimum 5% of their total loan books to SMEs by the end of 2015.

This measure, introduced following a 2014 CBO report which recognised limited access to and the high cost of finance as an inhibiting factor for SME growth, has posed challenges for the banking sector. The small number of SMEs in the market combined with their relatively modest financing requirements, means that the larger banks in particular face difficulty building up sizable loan books in the segment.

A new definition of SME introduced in January 2016 which significantly increases the number of enterprises eligible for SME funding is expected to make it easier for banks to reach the 5% target. Essentially, larger enterprises (measured by the higher of turnover or staffing levels) will now be treated as SMEs. The decision classifies a micro enterprise as one with 1-5 employees and turnover of less than OMR100,000 (previously 1-4 employees and turnover of less than OMR25,000); a small enterprise has 6-25 employees and turnover of OMR100,000-499,999 (increased from 5-9 employees and turnover of OMR25,000-250,000); and a medium enterprise has 26-99 workers and turnover of OMR500,000- 2,999,999 (increased from 10-99 employees and turnover of OMR250,000-1,500,000).

According to industry experts, the measures taken by the banking regulator have led to plenty of liquidity in the market to finance smaller firms. The main challenges now for the sector are lack of innovation and entrepreneurial culture, business skills and proper auditing/accounting mechanisms for SMEs.

For further information, contact banking and finance team members, Marcus Pery or William Barrie.