11 October 2005

Al Ahlia Gulf Holding Company gives the go-ahead for US$ 100 Million Lagoon City Sukuk Issue

Kuwait City, 11 October, 2005 – Al Ahlia Gulf Holding Company, the wholly owned subsidiary of Al Ahlia Investments Company announced today that it has mandated Kuwait Finance House, Liquidity Management Centre BSC and Muthanna Investment Company and (the Mandated Lead Arrangers) to jointly arrange for the US$ 100 million Islamic Musharaka Sukuk issue in support of the Lagoon City residential and commercial real estates development as part of the Kheiran Pearl City project.

The Kheiran Pearl City project which was initiated in February 2004 sets a precedent in Kuwait for the private sector contribution towards the urban development outside the capital Kuwait City. The project development will be over a total area of 731,000 sq. meters with an estimated total cost of KD 120mm (approximately US$ 410 million) consisting of 545,000 sq. meters of water-front plots; 106,000 sq. meters of back-bay plots and 80,000 sq. meters of commercial plots.

Speaking on this occasion, Mr. Abdul Aziz Ibrahim Al Nabhan, Chairman and Managing Director – Al Ahlia Gulf Holding Company, said: “the engagement of the Mandated Lead Arrangers is another significant step forward in the development of the Lagoon City that has already attracted considerable investments from the Kuwaiti public”. “We are confident that the Sukuk Issue will further confirm the significant contribution of the Islamic Finance industry in the development of the Kuwaiti economy, particularly the real estate sector” Mr. Al Nabhan added.

Commenting on the Sukuk issue, Mr. Abdullah Al Awadi, Assistant General Manager – Al Ahlia Gulf Holding Company said that: “our association with Kuwait Finance House, Liquidity Management Centre and Muthanna Investment Company will not only support the Lagoon City development but will further attract regional investments in the real estate development projects in Kuwait. The Lagoon City project has already shown considerable enthusiasm among the local Kuwaiti investors and with the placement of the Sukuk Issue, we will see increased momentum for the project from both the local and regional investors”.

Mr. Ahmed Abbas, Chief Executive Officer of Liquidity Management Centre commented: “We are very proud to be associated with a name like Al Ahlia Group and to support them in their ongoing business expansion projects such as the Kheiran City development”. Mr. Abbas added: “Our involvement in the arrangement of Lagoon City Musharaka Sukuk is the Liquidity Management Centre’s second Sukuk arrangement out of Kuwait and has already attracted an overwhelming interest from both regional and international investors prior the official market offering of the Sukuk”.

Al Ahlia Gulf Holding Company and mandated was signed on 18th September, 2005 and since the Sukuk issue been fully underwritten. The US$ 100 million Sukuk which will have a two year maturity has been structured based on an Islamic Musharaka contract in compliance with the Islamic Shari’a principles by the Liquidity Management Centre who has also been appointed as the Islamic Structuring Advisor for the transaction. The Musharaka Sukuk will be backed by the Lagoon City project assets and supported by the parent company, Al Ahlia Investments Company who has a current “BBB+” rating from Capital Intelligence. The Sukuk Underwriting Group is led by the Senior Lead Manager Kuwait Finance House from Kuwait and the Lead Managers Emirates Islamic Bank from Dubai, Bahrain Islamic Bank and Liquidity Management Centre from Bahrain.

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