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Kuala Lumpur, 17 December 2007 - The Hongkong and Shanghai Banking Corporation Limited (HSBC) and Kuwait Finance House (Malaysia) Berhad (KFHMB) have successfully arranged an Ijarah facility, an Islamic leasing structure for SREI Infrastructure Finance Limited (SREI). The deal is the first Islamic financing to originate out of India.
SREI, an active participant in infrastructure financing, is one of the leading non-banking financial institutions in India. SREI's primary business includes financing of construction equipment, infrastructure projects, import of machinery and renewable energy systems in India.
HSBC and KFHMB were appointed as the mandated joint lead arrangers for this financing. The US$50 million facility will be used by SREI for the acquisition of machinery and equipment, which SREI will subsequently lease out to companies involved in infrastructure projects in India.
Mr Yakub Bobat, Managing Director, HSBC Amanah Malaysia, said "SREI is an important client of the HSBC Group. This is the third successful transaction that we have lead arranged for SREI and the first to be structured in a Shariah-compliant manner in order to tap the liquidity available in the Middle East. This is also the third cross-border transaction that HSBC Amanah Malaysia, as HSBC's regional Islamic centre of excellence, has completed in Asia in 2007. This is a reflection of our commitment to support the drive to make Malaysia a regional Islamic financial centre."
"We are pleased to be involved in this arrangement as we can make a strong presence in India, given its prominence as an emerging market," says Dato' K. Salman Younis, Managing Director of KFHMB. "The unprecedented rise of the Indian economy in the last decade has been nothing short of remarkable and further characterises the changing dynamics of the global economy."
"This unique funding route will open up a plethora of opportunities, especially in the infrastructure sector. We are also very happy to be the first company in the financial sector in India to successfully probe this route for infrastructure funding," Mr. Hemant Kanoria, Vice Chairman and Managing Director of SREI Infrastructure Finance said.
"We are confident of the prospects for promoting Islamic financing in India and KFHMB would seriously consider them should we be approached with such opportunities," added Dato' Salman.
Mr. Bobat commented: "This landmark transaction provides a good opportunity for Middle Eastern investors to gain exposure to the booming infrastructure sector in India."
India has emerged as the second fastest growing economy in the world after China, propelling itself as a global economic powerhouse in the Asia Pacific region. India's vast growth is mainly driven by higher domestic consumption, exports and investment. Economic growth in India has averaged 8.6 per cent annually for the past four years.
HSBC has been offering Islamic financial solutions in Malaysia since 1994. Globally, the HSBC Amanah brand was established in 1998, with the aim of making HSBC the leading provider of Islamic banking services worldwide. Recently, HSBC became the first locally incorporated foreign bank in Malaysia to be awarded a licence to set up an Islamic Banking subsidiary by Bank Negara Malaysia.
KFHMB has the expertise in international Islamic financing arrangements and has been involved in cross-border deals including those in China. Such achievements are in line with Malaysia's vision to emerge as the regional Islamic finance hub in Asia.
SREI, an active participant in infrastructure financing, is one of the leading non-banking financial institutions in India. SREI's primary business includes financing of construction equipment, infrastructure projects, import of machinery and renewable energy systems in India.
HSBC and KFHMB were appointed as the mandated joint lead arrangers for this financing. The US$50 million facility will be used by SREI for the acquisition of machinery and equipment, which SREI will subsequently lease out to companies involved in infrastructure projects in India.
Mr Yakub Bobat, Managing Director, HSBC Amanah Malaysia, said "SREI is an important client of the HSBC Group. This is the third successful transaction that we have lead arranged for SREI and the first to be structured in a Shariah-compliant manner in order to tap the liquidity available in the Middle East. This is also the third cross-border transaction that HSBC Amanah Malaysia, as HSBC's regional Islamic centre of excellence, has completed in Asia in 2007. This is a reflection of our commitment to support the drive to make Malaysia a regional Islamic financial centre."
"We are pleased to be involved in this arrangement as we can make a strong presence in India, given its prominence as an emerging market," says Dato' K. Salman Younis, Managing Director of KFHMB. "The unprecedented rise of the Indian economy in the last decade has been nothing short of remarkable and further characterises the changing dynamics of the global economy."
"This unique funding route will open up a plethora of opportunities, especially in the infrastructure sector. We are also very happy to be the first company in the financial sector in India to successfully probe this route for infrastructure funding," Mr. Hemant Kanoria, Vice Chairman and Managing Director of SREI Infrastructure Finance said.
"We are confident of the prospects for promoting Islamic financing in India and KFHMB would seriously consider them should we be approached with such opportunities," added Dato' Salman.
Mr. Bobat commented: "This landmark transaction provides a good opportunity for Middle Eastern investors to gain exposure to the booming infrastructure sector in India."
India has emerged as the second fastest growing economy in the world after China, propelling itself as a global economic powerhouse in the Asia Pacific region. India's vast growth is mainly driven by higher domestic consumption, exports and investment. Economic growth in India has averaged 8.6 per cent annually for the past four years.
HSBC has been offering Islamic financial solutions in Malaysia since 1994. Globally, the HSBC Amanah brand was established in 1998, with the aim of making HSBC the leading provider of Islamic banking services worldwide. Recently, HSBC became the first locally incorporated foreign bank in Malaysia to be awarded a licence to set up an Islamic Banking subsidiary by Bank Negara Malaysia.
KFHMB has the expertise in international Islamic financing arrangements and has been involved in cross-border deals including those in China. Such achievements are in line with Malaysia's vision to emerge as the regional Islamic finance hub in Asia.
