Elaf Bank, an Islamic investment bank incorporated in the Kingdom of Bahrain, along with a consortium of Southeast Asian banks, entered into a Syndicated Ijarah Facility with Indonesia Air Transport (IAT). The Ijarah amount was for the lease of 3 helicopters at a cost of USD 31 million during a tenure of 4 years. The contractual agreement was signed by representatives from the syndicate of banks financing the deal, including Elaf Bank, as well as a representative from IAT, at a formal signing ceremony that was held in Jakarta, Indonesia on December 23, 2009.
Mr. Ahmad Tayara, General Manager of the Investment Banking Division at Elaf Bank, attended the signing ceremony and commented on the importance of this step, which falls in line with the Bank’s objectives to do more syndication business throughout the coming year. "Certainly, the new paradigm warrants new strategies. The investment landscape has been terribly altered and everyone is going back to basics. Our goal will be to team up with other banks that share our objectives and bring to investors income-generating transactions that have risk-adjusted returns.”
With Elaf Bank, the syndicate included, PT. Al-Ijarah Indonesia Finance (indirectly and partially owned by Elaf Bank), Bank Muamalat Indonesia, Permata Syariah Bank (Subsidiary of Standard Chartered Bank), Bank Syariah Mandiri, and Asian Finance Bank, Malaysia. Mr. Tayara noted the history of the client by saying, “IAT has a long and successful track record. It was established in 1968 as an airline and aviation company based in Jakarta, Indonesia, providing a wide range of aviation services to the oil, gas and mining industries within Indonesia and Southeast Asia, both on and offshore. The fact that the assets are new coupled with the client’s track record, the backing from the assignment of a contract with an oil and gas giant, the buy back guarantee from the manufacturer, as well as a good Ijarah rate makes the deal all the more attractive.”
Mr. Tayara added, “There can be no doubt that nowadays capital is shy, and a steady Ijarah coupon on a medium term is favored over private equity and real estate ventures with a long investment horizon”. Furthermore, Elaf Bank strongly believes in developing its business through two hubs covering the GCC and MENA region and the Southeast Asia region, as a business corridor. This endeavor is a testimony to that effect.
Commenting on the significance of the Ijarah Facility in Indonesia, Dr. Jamil El-Jaroudi, CEO of Elaf Bank, noted, “Expanding our syndication business in Indonesia definitely falls in line with our keen interest to promote the two-region business corridor in a prudent and well-controlled manner.” He added, “This opportunity must be credited to our business networking capabilities, particularly within the MENA and Southeast Asia regions, and is a welcomed step forward emphasizing our interest to cooperate with other ambitious markets to maximize profits and returns for our investors and shareholders.”
