Dubai investment deal for manufacturer
International Innovative Technologies, a maker of industrial milling machines in the North-East, has raised $10m through a private-equity-style sukuk to help develop new products, its legal adviser, Norton Rose, said.
Dubai-based Millennium Private Equity Ltd will be the sole investor in the sukuk, which will be listed on the Cayman Islands Stock Exchange. The sukuk will pay 10 per cent a year and will expire in 2014.
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Hide AdThe sukuk is using a so-called musharaka structure, also known as profit-and-loss sharing, allowing Millennium an option to take a stake in IIT.
Sukuk are generally certificates of ownership of either an asset or a project, or a business venture.
In musharaka, parties contribute capital to a venture with profits to be shared in an agreed ratio, while losses are generally divided in line with capital contributions.
Before the credit crisis, Islamic finance had been touted as a more reliable source of capital for companies because of its use of tangible assets, but the sector suffered a dent in the wake of the Dubai debt crisis.