Ali Kardor was quoted as saying by state TV that the measure is intended to help NIOC fund its development projects and has been devised in collaboration with the stock exchange. He did not elaborate on how much sukuk the company is about to issue.
Manfa’ah or usufruct sukuk are valuable financial deeds indicative of the ownership of the holder on a certain service or future profit of a durable asset.
Essentially, Manfa’ah is a derivative of Ijarah sukuk. The issuer divides its right of use of an identifiable asset over a predetermined period of time into specific units and transfers these rights to sukuk holders. The sukuk will be backed not by the issuer but rather by the asset or the cash flow generated from the asset, Financial Tribune reported.
The government issued the first batch of Manfa’ah sukuk in March amounting to 30 trillion rials (212.76 million) with a maximum 20.1% interest and backed by 100% of government revenues in the National Iranian Oil Refining & Distribution Company, Telecommunications Infrastructure Company and 78% in National Iranian Gas Company, the head of Capital Market Central Asset Management Company, Gholamreza Aboutorabi, said at the time.