MIDHCO Subsidiaries to Issue $219m Worth of Sukuk

Three of Middle East Mines Industries Development Holding Company’s subsidiaries plan to issue 10.6 trillion rials ($219.64 million) of Islamic bonds to finance their expansion projects, an official with Securities and Exchange Organization said. “The organization has agreed with Sirjan Iranian Steel Company, Butia Iranian Steel Company and Babak Iranian Copper Company’s request to issue 4, 3.6 and 3 trillion rials of Ijarah sukuk respectively,” Ali Beygzadeh also told Bourse Press. The debt securities, tradable on Iran Fara Bourse’s second market, will bear 16% interest and mature in four years. All three companies will use the money raised to finance remaining expansion projects (pellet and copper cathode production, direct iron reduction) and boost their capital. Ijarah sukuk are securities representing the ownership of well-defined assets tied up to a lease contract, the rent for which is the return payable to sukuk holders. Established in 2007, MIDHCO is a mining investment company operating in steel, iron ore and copper production.