Dinar Organizes the First Public Offering of Debt Instruments in Saudi Arabia Worth SAR 100 Million
Al Kathiri Holding Company announced its intention to issue Saudi riyal-denominated sukuk worth SAR 100 million through Dinar Investment Platform.
In a statement published on Tadawul’s website, Al Kathiri Holding stated that it plans to issue sukuk under the first series of its local sukuk issuance program, with a total program value of SAR 500 million. The sukuk will be offered to the public through a special purpose vehicle (SPV) named Al Kathiri Sukuk.
This issuance marks the first public offering of debt instruments in Saudi Arabia through a fintech company, represented by Dinar Investment Platform, and the second public issuance overall following Al Rajhi Bank’s listed sukuk.
Sukuk Details
- Sukuk Value: SAR 1,000 per sukuk
- Nominal Value: SAR 1,000 per sukuk
- Minimum Subscription: 5 sukuk (SAR 5,000)
- Maximum Subscription: No maximum limit
- Offering Size: SAR 100,000,000 (First Issuance)
- Offering Start Date: March 12, 2023
- Offering End Date: March 23, 2023
- Refund Date: April 2, 2023
- Annual Return: 8.5%
- Profit Distribution: Semi-annual
- Type of Issuance: Publicly tradable sukuk (Public Offering)
- Sukuk Structure: 49% Murabaha + 51% Mudaraba
- Maturity: 5 years from the settlement date
- Redemption Terms: Redemption at the end of the first series maturity period
- Receiving Entities: Dinar Platform – Riyad Bank – Arab Bank
- Issuance Manager: Alkhair Capital Saudi Arabia (Financial Advisor & Lead Arranger)
- Sharia Committee: Led by Dr. Yousef Al-Shubaili, Sharia Advisor at Alkhair Capital
- Eligible Investors: Individuals and institutions authorized to invest in sukuk within Saudi Arabia
Frequently Asked Questions
1. Can I sell the sukuk, and how?
Yes. These sukuk are tradable and can be sold through the brokerage firm you deal with.
2. Is zakat applicable to these sukuk?
According to Al Kathiri Holding, the sukuk are treated as capital assets and are included in the company’s zakat base; therefore, investors are not required to pay zakat on them individually.
3. How can I invest in Al Kathiri Sukuk via Dinar Platform?
You can invest directly through the Dinar mobile app or the website by registering your details, funding your account, and subscribing to the sukuk.
4. Can an investor subscribe through both Dinar and a participating bank?
No. The investor must select one specific channel and subscribe through a single entity.
5. Where will the sukuk be traded?
The sukuk will be traded on the Tadawul platform after settlement. They will be deposited into investors’ portfolios and can be traded via their chosen brokerage firm.
6. If I subscribe via Dinar, can I choose any brokerage firm for my sukuk deposit?
Yes. You can select your preferred broker when investing through Dinar Platform.
7. Are the sukuk Sharia-compliant?
Yes. They are fully compliant, as stated in the issuance prospectus.
8. How can I access detailed information about Al Kathiri Sukuk?
You can view the full details and the issuance prospectus on the Capital Market Authority’s website or on the Al Kathiri Sukuk official website.
The company emphasized that institutional investors wishing to purchase sukuk must submit a duly completed Investor Purchase Application Form to the Lead Arranger.
Meanwhile, individual investors are required to submit the completed form to the receiving entities through the available channels, including online banking, phone banking, or ATMs.
It is important to note that all purchases are subject to the terms and conditions outlined in the Investor Purchase Application Form and the Base Prospectus dated September 28, 2022.
The company stated that the proceeds of the offering will be used for its general corporate purposes and to achieve its financial and strategic objectives.
