SATORP, a company that is 62.5 percent owned by Aramco and
37.5 percent owned by Total (TOT), plans to build a crude oil refinery in
Jubail.
Apparently, this joint venture is raising money from a
variety of sources, such as $1.3 billion from the Saudi Arabian Public
Investment Fund (PIF), the IPO of SATORP offering 25 percent of the company,
and the market is eagerly anticipating the details of the Jubail Refining and
Petrochemical Company sukuk, worth SR3.7 billion.
The aforementioned sukuk recently announced their respective
lead managers were Banque Saudi Fransi (affiliate Credit Agricole Corporate and
Investment Banking ), Deutsche Bank, Samba Capital and Investment Management
Company.
However, this is only the beginning of the story. Apparently
SATORP has announced a series of projects that shall raise billions for items
like the "Conversion Unit and Sulphur Package", "Coker
Package", etc.
It is an exciting time for the financial markets of the
Middle East, as we close out the first decade with deals that can only spur the
financial industry forward.
Islamic banking has become the chosen means of finance not
only with Islamic companies, but also with multinational corporations like
Total. Rest assured, based on the research that we have undertaken at the KIN
Consortium, 2011 is going to be an extraordinary year. Both the IPO pipeline
and sukuk pipeline are growing daily. We are keeping a vigilant watch over the
new projects that are vying for the facilities offered by Islamic finance.
The fact of the matter is that this is the most creditworthy
source of finance available in 2010. Collateralized loans are fundamentally a
better investment than the conventional products in the Western markets. Lets
make a short list of foreign governments that are planning to launch Islamic
banking solutions like sukuk:
• United Kingdom sovereign sukuk
• Turkey sovereign sukuk
• South Africa sovereign sukuk
• Singapore sovereign sukuk
• France sovereign sukuk
• Hong Kong sukuk
• Kerala sukuk
• Government of Indonesia exchangeable sukuk
• Government of Philippines sukuk
 
While I realize that a cynical man might point out that some
of these countries aren't even Muslim, I am thrilled to see the world yielding
to their desire to collateralize their loans. Think it through for a moment. If
the governments default, does the Islamic bond holder actually hold the deed to
a country? We are living in interesting times.
 
(Khalid I. Natto ([email protected]) is chairman
& CEO of The KIN Consortium.)