Manama: Bahrain-based Islamic Investment bank, Ibdar Bank on Sunday said that it had concluded the agreement for $100 million finance 12year tranche.
Ibdar Bank had contributed as investor with $22 million, while an amount of $78 million was secured through a funding agreement with Canada’s Export Credit Agency (EDC), the export finance agency of Canada.
The bank said the agreement would expire in 2026 for acquiring four brand new Bombardier Q400 Next Gen aircrafts and leasing them to the Ethiopian Airlines.
The deal that was structured under a joint venture with Dubai-based operating lessor Palma Holding marked the first ever Sharia-compliant transaction in Africa’s aviation sector. The agreement includes options for an additional four Q400 NextGen aircraft, which Ibdar Bank intends to exercise in the near future.
This was announced during a Press conference by Basel Al-Hag-Issa, Chief Executive Officer of Ibdar Bank, who highlighted that the Bank has received its first dividend from the Ethiopian Airlines following this milestone transaction.
The Aircrafts, equipped with two engines each, have been delivered over a period of three months, with the first Aircraft delivered on 19 June 2014 and the last Aircraft was delivered on 29 August 2014.
“This opportunity comes at a time when Ethiopian Airlines, an award winning African airline with strong financial and operating track record, is embarking on an ambitious fleet expansion program amidst strong growth in African air travel,” Al-Hag-Issa, said.
He added that the aviation industry in Africa and the MENA markets would continue to report some of the strongest growth rates of any region.
Al-Hag-Issa said that Ibdar Bank is providing select investors with the opportunity to acquire an indirect stake in the four Bombardier Q400 NEXTGEN Aircraft. Investors can expect to receive returns of 10% cash yield per annum, payable on a quarterly basis.
For Ibdar, this is its second aircraft leasing transaction. The first was concluded with Emirates Airline in 2011 whereby the Bank acquired a Boeing 777-200ER from Emirates and leased it back to the airline for a fixed six year-term. The Bank also participated in a syndicated financing facility of $5 million for the Bahrain-based carrier Gulf Air in 2009, which has been fully repaid.
Al-Hag-Issa pointed that Ibdar is focused on originating new and innovative transactions that allow the Bank and its partners to excel.
“We have a strong pipeline of opportunities in other sectors where equally we intend to build on growth in consumer patterns across our markets of focus and in industries where we have the experience and know-how to deliver solid returns,” he said.
Ibdar Bank is active in private equity in the GCC and MENA markets, in regional and global real estate and has extensive experience in sectors including infrastructure, oil and gas, maritime and retail, among others.
In addition to financing and leasing in the aviation sector, Ibdar is focused on originating new and innovative transactions that allow the Bank and its partners to excel. We have a strong pipeline of opportunities in other sectors where equally we intend to build on growth in consumer patterns across our markets of focus and in industries where we have the experience and knowledge to deliver solid returns.