Manama – Bahrain-based Islamic Investment bank, Ibdar Bank successfully concludes the structuring of a 12-year agreement expiring 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.

The announcement was made yesterday during a press conference by the recently joined, Mr. 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 .

Valued at USD 100 million, Ibdar Bank contributed as investor with USD 22 million, while an amount of USD 78 million was secured through a funding agreement with Canada’s Export Credit Agency “EDC”, the export finance agency of Canada.
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,” said Mr. Al-Hag-Issa. Adding that the aviation industry in Africa and the MENA markets continue to report some of the strongest growth rates of any region.
Mr. 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 USD five million for the Bahrain-based carrier Gulf Air in 2009, which has been fully repaid.

Mr. 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 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.

About Ibdar Bank

Ibdar Bank (“Ibdar”) is an Islamic investment bank incorporated in the Kingdom of Bahrain, where it operates under a wholesale Islamic banking license and is regulated by the Central Bank of Bahrain.

The Bank has USD300 million in paid up capital, an asset base in excess of USD400 million – as at end of September 2014 – and significant funds for deployment. Ibdar is engaged in private equity, capital markets and real estate, activities through which it aims to generate diversified and recurring income streams for the Bank, its shareholders and co-investors.

Geographically, the Bank’s focus is on the GCC and MENA region including Turkey. It also transacts in Southeast Asia and select developed markets on an opportunistic basis. Ibdar has a significant expertise in areas such as Aviation, Infrastructure, Maritime, Oil Gas, and Real estate, among others.

The Bank was created from the first three-way merger in the Islamic banking industry between Capital Management House (CMH), CAPIVEST and Elaf Bank in 2012 and was then re-launched as Ibdar Bank in November 2013.

 


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