USD 300 million Sukuk will prevent Maldives from an economic shock in 2023

Newly appointed Spokesperson of the Presidents Office, Mohamed Mabrook Azeez | Photo: Mihaaru

Malé, Maldives –  Spokesperson of the President’s Office Mabrouq Azeez has stated that USD 300 million Sukuk will prevent Maldives from experiencing an economic shock in 2023.

Mabrouq said that the Sukuk would allow for the state to acquire much needed funds through international markets, and that repayments can be done within 5 years which would prevent the country going into economic shock in the year 2023.

At a press conference held earlier today at the President’s Office, Mabrouq stated that countries such as Egypt and Laos attempted to issue sukuks, but were unable due to low interest in markets, however, that it is hopeful that Maldives would find success.

Mabrouq disclosed that the government is currently working with the most well versed organisations in such financing. He went onto name these organizations as Credit Suisse CSGN.S, Emirates NBD Capital ENBD.DU, HSBC HSBA.L and the Islamic Corporation for the Development of the Private Sector (ICD).

Due to a euro bond taken by the government in 2017, repayment numbers are especially high next year, said Mabrouq. He revealed that the MVR 6.3 billion (USD 400 million) euro bond taken in 2017 has resulted in repayments to be at an estimated MVR 250 million in 2022.

Mabrouq noted that this has led to issues solving budget scarcity for the next year, but that issuing a sukuk is projected to play a huge role in resolving this problem.

He also stated that the Ministry of Finance decided to go for a sukuk as repaying over 5 years was deemed more advisable than a repayment period of a single year.

While some believe that, if the government is unable to repay the sukuk, Dharumavantha Hospital- the asset to be used in the sukuk, will be sold. Reassuring that this will not happen, Mabrouq noted that the sukook agreement will ensure that the hospital will be in a 100% state owned Special Purpose Vessel (SPV).

He clarified that Dharumavantha Hospital is not being mortgaged, explaining that the government being unable to repay the bond and defaulting will not result in ownership of the hospital being lost to a company or individual abroad.

Mabrouq stated that the Ministry of Finance is going ahead with the sukuk, with transactions finalizing the 8th of April, after which the Ministry will release all related information.