Saudi Fintech Entity Emkan Finance Issues Second Sukuk in 2024 in August Through a Private Placement Followingits Benchmark SAR2.3bn (US$604.6mn) Senior Sukuk Mudaraba in February
Emkan Finance, a leading Saudi fintech company specializing in financing and payment solutions, successfully closed its latest Mudaraba Sukuk in August 2024, which was distributed through a private placement.
AlRajhi Financial Company was mandated to act as the financial advisor and sole lead manager in overseeing the issuance process. According to AlRajhi Financial Company, the offering attracted strong demand from qualified individual investors, institutions, companies, and charitable organizations.
This issuance together with the overall number of Sukuk issued in the Saudi market, underscored “the positive outlook for the financial sector’s growth—a key objective of the Financial Sector Development Programme under Saudi Arabia’s Vision 2030.”
In its announcement, AlRajhi Financial Company did not disclose any details of the size of the issuance nor the pricing and yield, albeit local banking sources stress that it could be a benchmark size more than SAR2bn (US$530mn). Prior to this latest transaction, Emkan Finance has issued several Sukuk in the past. In fact, this August offering is the company’s second Sukuk issuance in 2024.
On 15 February 2024, Emkan Finance, raised SAR2,268.39mn (US$604.57mn) through a benchmark Subordinated Senior Sukuk Mudaraba.
The full subscription of the August 2024 Sukuk issuance, says Emkan Finance, highlights investor confidence in the local market and strengthens the company’s financial liquidity. The full subscription in the second issuance of Sukuk in 2024 will enable Emkan Finance to continue offering innovative financing solutions through financial technology, including the launch of new products via the Emkan app, which provides customers with a seamless and fast digital experience anytime, anywhere.
According to Abdullah Al-Habdan, CEO of Emkan Finance, “the high demand for both our first and second Sukuk issuances this year serves as a strong incentive for us to further diversify our funding sources and drive the company’s growth. We appreciate the support of our investors for their trust in Emkan Finance, reaffirming the company’s commitment to delivering the best Sharia’a-compliant financial technology solutions.”
The 5-year SAR2,268.39mn (US$604.57mn) subordinated unsecured Sukuk Mudaraba issued by Emkan Finance on 15 February 2024 and solely distributed by Alrajhi Capital, has a coupon rate of 5.1%
This milestone transaction stressed Emkan Finance CEO’s Abdullah Al-Habdan underscores the optimistic outlook for the financing market’s growth, aligning with the strategic objectives of the Kingdom’s Vision 2030 Financial Sector Development Programme. He commended the enthusiastic investor reception to the Sukuk offering, reflecting the deep trust in the company’s financial instruments.
Emkan Finance is set to expand its product offerings through the Emkan app, introducing competitive, digitally streamlined services that promise to boost financing applications from its clientele. This Sukuk issuance, like the one in February 2024 paves the way for future endeavours aimed at diversifying funding sources, he added.