Dentons advises Virgin Mobile Middle East on pre-IPO convertible Sukuk

Dentons advises Virgin Mobile Middle East on pre-IPO convertible Sukuk
Published: 21 May 2018 - 4:27 a.m.
By: Georgina Enzer

Dentons has advised Virgin Mobile Middle East and Africa (VMMEA), on the issuance of its $30 million pre-IPO exchangeable senior secured Sukuk, which was privately placed. The company plans to use the proceeds to fund growth and expansion.

"We are delighted to have worked with VMMEA and Arqaam on this landmark transaction. It's a fairly novel instrument for our region, as we've had only a handful of Pre-IPO convertible or exchange bonds or sukuk to date. It's the first one using an airtime structure and also involved putting in place security in favour of investors in various jurisdictions," said Dentons Debt Capital Markets partner Alex Roussos.

Ward Yates advised as Jersey and BVI counsel, while VG acted as corporate services provider to the special purpose vehicle (SPV) issuer.

Dubai-based VMMEA, a mobile virtual network operator, has been in the region since 2007. The company has two consumer brands, Virgin Mobile and FRiENDi Mobile; operations in Saudi Arabia, Oman and South Africa; and a partnership with EITC in the UAE.

Arqaam Capital acted as the lead arranger and book runner, while BNY Mellon acted as the delegate and Minhaj Advisory acted as the Shari'ah advisor.

The Sukuk is based on an airtime structure and includes novel redemption features and an option for investors to exchange the Sukuk for shares in the parent company of the Group in the event of an initial public offering. Credit enhancement included a financial covenant package and certain security in favour of the investors.

The Dentons team was led by partner Alex Roussos, with assistance from senior legal consultant Katie Phillips, senior associate Carina Onzer and associate Sana Siddiqui.

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