Conglomerate had approached banks earlier this year to discuss arranging a potential sukuk issue of around $200m
Al Faisal Holding, a Qatari conglomerate, is considering alternative debt funding options after the idea of a US dollar sukuk issue received a lukewarm response from the market, sources familiar with the situation said.
The conglomerate had approached banks earlier this year to discuss arranging a potential sukuk issue of around $200 million.
The issue, which would have been the company's first international debt raising exercise, may now be replaced by a syndicated loan, the sources said.
A spokesman for the company said in an emailed response to Reuters that Al Faisal does not have any short-term plans to issue sukuk.
Al Faisal is always open to discussions about how best to fund its operations, the spokesman said.
The conglomerate's potential sukuk issue would have been a privately placed, secured transaction, but market expectations for the deal were different, said one source familiar with the deal.
The source said potential investors had expected Al Faisal to make a more sizeable, unsecured sukuk issue with a structure similar to the $500 million debut sukuk issued by another Qatari company, Ezdan Holding, earlier this year.
Ezdan, which has recently closed a $460 million syndicated loan, issued its first sukuk in May. The five-year deal offered a 4.375 percent profit rate.
Al Faisal, founded in 1960 by Sheikh Faisal Bin Qassim Al Thani, does not have a credit rating. It operates in sectors including property development, entertainment, hospitality, education, transport, trading and international investment.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.