FG issues N100bn sovereign sukuk at 15.7%

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…As 80,000 workers protest Hyundai’s low-wage plans in S. Korea***

The Federal Government has begun the sale of its second tranche, the 7-year N100 billion sovereign sukuk, the Debt Management Office (DMO), said on Thursday.

The offer circular, which was obtained from its website, said the seven year Islamic sukuk, referred to as Ijarah is at a rental rate of 15.74 per cent and would be due in 2025.

The bond, which is aimed at funding road infrastructure across the six geo-political zones, is payable semi-annually.

Subscription for the bond, which is guaranteed by the government, will close on Dec. 17.

The circular said subscribers could purchase N1,000 per unit subject to a minimum subscription of N10,000  and in multiples of N1,000 thereafter with First Bank and Islamic wealth manager, Lotus Capital managing the sale.

The DMO said it qualified as securities in which trustees could invest under the Trustee Investment Act and as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for Pension Funds.

It will also be listed on the Nigerian Stock Exchange (NSE) and on FMDQ Over-The-Counter (OTC) platform and be classified as liquid asset by the Central Bank of Nigeria (CBN).

It is also certified by the Financial Regulatory Advisory Council of Experts (FRACE) of the CBN, the circular said.

The Federal Government had, in 2017, raised a N100 billion 7-year debut Sukuk bond for the financing of 25 road projects across the six geopolitical zones of the country.

Meanwhile, the Hyundai’s Motor company’s plans for a low-wage factory in the South Korean city of Gwangju has been met with employee protests on Thursday.

According to the Korean Metal Workers Union (KMWU), about 80,000 workers from Hyundai Motor and sister company Kia went on strike for four hours as a warning.

“They wanted to protest the Gwangju Jobs Model Project,’’ KMWU’s automotive industry director, Ha Young Chul, said.
Hyundai and the city government of Gwanju are in negotiations for the construction of a factory where employees would be paid an annual salary of roughly 35 million won (31,160 dollars).

The average annual salary for Hyundai employees nationwide stands at 92 million won.
The planned factory would produce mini SUVs.

The world’s fifth largest automotive group wants a 19-per-cent share in the joint venture for the project, initiated by the city.

But negotiations came to a halt this week due to wage disputes with the union.

Hyundai said it would make a “final decision’’ whether to involve itself if it deems the project “feasible.’’