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ITFCEnticesthePrivateSectorinSudan

PublishedonInternationalIslamicTradeFinanceCorporation(http://www.itfcidb.org)

ITFCEnticesthePrivateSectorinSudan
ITFChassuccessfullytailormadeShariahcompliantsolutionsinordertomeetthespecific
needsoftheclientandtoeffectivelycompeteinanaggressivemarketenvironment.Inthis
way,ITFCmanagedtoharnessadiversifiedportfoliowithsugarasoneofthemajor
commodities.Takingbusinessastepfurther,ITFClentitssupporttotheprivatesectorin
Sudan,byfinancingasignificantsugardeal,whichhelpedinadvancingtheprivatesector
rolethroughasustainedcommitmenttoimproveaccesstovalueaddedandcompetitive
financing.

ITFCwasabletodesignthefirstCoFinancedOperationprovidedbytheIDBGrouptothe
privatesectorinSudan.UnderthisCofinancing,theITFCasanarrangerandafinancier,
andOPECFundforInternationalDevelopment(OFID)asafinancierextendedaMurabaha
FinancingwiththeamountofUS$50millioninfavorofKenanaSugarCompany(KSC)in
ordertoimportRaw&WhiteSugarfromdifferentsourcesworldwide.

Inthisdealstructure,ITFC&OFIDeachcontributedwiththeamountofUS$25millionforthe
purposeofusingsuchcontributionintheMurabahaFinancingwithKSCforpurchasingRaw
andWhiteSugar.ThefinancingwasgrantedtoKSConcleanbasisastheparticipantstook
thedirectriskofKSC.However,aDebtServiceReserveAccount(DSRA)heldbyathird
partywassetuptheDSRAwasdesignedinordertomitigatetheForexrisksincethefacility
isdenominatedinUSDollarswhiletherepaymentisinEURO.

ByextendingsuchfinancingtoSudan,ITFCsupportedthesugarmanufacturingindustryin
ordertogetSudanrecognizedonceagainasthebiggestandtheonlysugarexporterinthe
region.ITFChasnotonlycreativelydesignedthisoperationithassupported,alongwiththe
othercofinancers,thebiggestAgroIndustrialCompanyinthecountry,andbythis,the
CofinancierssupportedtheAgriculturalSector(representing27%ofSudansGDP)as
wellastheIndustrialSector(representing36%ofSudansGDP).ITFCbelievesthatthis
financingoperationisastepforwardonthewayofitsstrategiestosupportanddevelopthe
economyofSudan.

DealMechanics
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ITFCEnticesthePrivateSectorinSudan

1.KSCconcludesimporttransactionswithitssuppliersonbehalfofITFCasITFCwill
buytheSugarfromthesupplieronspotandthensellittoKSCondifferedbasis.
Kenana,throughalocalbank,issuesaNonoperativeLetterofCreditinfavorofthe
Supplier,acopyofthisLCissenttoITFCthroughauthenticatedmeans.
2.ITFCissuesanIrrevocableCommitmenttoReimburse(ICR)infavoroftheSupplier,
copiesofthisICRaresenttotheITFCPayingAgentandtheIssuingBank.
3.TheAdvisingbankadvisestheLC&theICRtotheSupplier.
4.TheSuppliershippedtheSugartotheportofdestinationinSudanandsubmitted
therequiredshippingdocumentstotheNegotiatingBank.
5.WhenthedocumentsarefoundincompliancewiththeLCtermsandconditions,the
NegotiatingBankwillcertifytotheITFCPayingAgentthatthedocumentsarefound
incompliancethroughauthenticatedmeans,andsendthedocumentstotheIssuing
Bank.
6.TheITFCPayingAgent,asinstructedintheICR,willtransferthevalueofthe
documentstotheNegotiationBank.Theresalepricewillbecomputedandadebit
advicewillbegiventoKenana.
7.KSCtakesthedeliveryoftheimportedSugarandonmaturitydate,Kenanawill
repayITFCtheresaleprice.

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ITFCEnticesthePrivateSectorinSudan

TermSheet

Instrument

MurabahaCoFinancing

Obligor

KenanaSugarCompany

PrincipalActivities

SugarRefining

Dateofissue

Aug.25th,2010

Issuesize

US$50million

Tenor/Maturity

Twelvemonthsfinancingtenor

Coupon

N/A

Repaymentschedule

BulletPayments

LeadArranger

ITFC

LeadManager

ITFC

Co
Arrangers/Managers

OPECFundForInternationalDevelopment(OFID)as
participant

LegalCounsel

ITFCLegal

FinancialAdvisor

nil

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ITFCEnticesthePrivateSectorinSudan

Guarantor

nil

Trustee

nil

ShariahAdvisor

Inhouse

Methodofissue

LettersofCredit

UtilizationofProceeds

Tobuyrawandwhitesugar

Ratings

nil

SourceURL:http://www.itfcidb.org/en/content/itfcenticesprivatesectorsudan

http://www.itfcidb.org/en/print/content/itfcenticesprivatesectorsudan

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