Abu Dhabi: Abu Dhabi Islamic Bank (ADIB) has announced the successful issuance of an Dh400 million sukuk (Islamic bond) for Mohebi Logistics, one of the largest vertically-integrated supply chain management companies in the Middle East. The issuance is structured under Sharia principles and is the first sukuk transaction for a Dubai South entity. ADIB has acted as sole book runner for the sukuk issue.
The sukuk proceeds will be utilised for the construction and development of Mohebi’s new warehouse and logistics centre in Dubai South.
The facility is planned to be one of the region’s most innovative developments, serving key multi-national corporations, including Nestle which is the world’s most renowned nutrition, health and wellness organisation. The new facility will have a storage capacity of 180,000 pallets and will be spread over 206,000 square metres.
The deal is a landmark transaction for Mohebi Logistics as it represents their debut financing in the capital markets and is the first sukuk issue based on an Istisna/Ijara structure.
As a result of ADIB’s close collaboration with the Dubai South team throughout the execution process, ADIB was able to work closely within the Dubai South framework to structure the Islamic financing in a sukuk format.
Tirad Al Mahmoud, ADIB’s chief executive officer, said: “We are keen to partner with organisations such as Mohebi Logistics to support their growth initiatives as they play a leading role in the retail distribution business. The transaction represents their debut sukuk issue and is testament to their support for the Government of Dubai’s objectives for establishing Dubai as a global centre of excellence for Islamic finance. We are also privileged to work alongside Dubai South and are confident that the free zone will strengthen Dubai’s position as a premier global trade and logistics hub.”
Mohammad Mohebi, the logistics’ company’s CEO, added, “The sukuk issue will prove instrumental in helping us more than double our existing storage and logistics capabilities. The substantial interest shown in the sukuk underlines the strong trust in Mohebi Logistics’ resilient growth plans and regional prospects. ADIB was selected to partner with us as a result of the bank’s specialist experience of structuring Sharia-compliant financing for companies in this region. This, combined with ADIB’s in-depth understanding of our company, makes them the ideal partner for this venture.”
Mohsen Ahmad, vice-president of the Logistics District at Dubai South, said, “It was our pleasure to assist Mohebi Logistics and to collaborate with ADIB on this successful issuance. We are always keen to provide solutions that support our partners and ensure their continuous success.”
