The government will go ahead with its plan to issue over $500 million sukuk (Islamic bonds) later this month despite the OGDCL debacle.
Finance Minister Ishaq Dar told journalists yesterday that the government would first hold roadshows and then float sukuk in the Middle East and Europe between November 21 and 24.
Pakistan had to scrap selling 10 per cent shares of the country’s largest petroleum producer – Oil and Gas Development Company Limited – last week to international investors due to massive undersubscription following the divestment, which was challenged in the courts and also opposed by the major political parties.
Dar said building foreign exchange reserves to $15 billion by end-December was important to qualify for concessionary financial support for development from the World Bank under IBRD (International Bank for Reconstruction and Development).
Sale of OGDCL shares was one of the three major sources including the IMF tranches and sukuk the government was expecting to boost foreign exchange reserves from $13.4bn now to $15bn.
“Perhaps, the government would like to increase the size of the sukuk from $500 million to $1bn to make up for the gap created by failed OGDCL transaction,” said an official requesting anonymity.
