The government has appointed Standard Chartered Bank as lead manager for PIA Sukuk bond to raise $250 million from the international market, besides picking- up Mezan Bank-led consortium of the local banks for raising Rs 13.7 billion from the local market.

The global Sukuk bond will mature in five years and maturity period for the local Sukuk will be eight years. The profit on both bonds will be equal and its percentage will be worked out in next few weeks.

Sources said the Standard Chartered Bank and the Mezan Bank-led banks'' consortium will study the local and international markets and suggest the government the time and exact size of the issue. The PIA and other concerned departments hope that the lead manager will complete the entire process of studying the global and local market. Holding of road shows in the international market for the bond issue and other formalities by the end of March and this will be followed by formal launching of the Sukuk bond.

Three international giants - Standard Chartered Bank, Citi Bank, and Bank of Shanghai - were in the race for getting the job of lead manager for facilitating global Sukuk issue. Similarly, the consortiums of more than three local banks had given presentation to the government economic managers in Islamabad and showed their strong commitment to raising desired money for PIA from the local and international markets.

In a meeting held last week, the authorities of the Ministry of Finance (MoF), two PIA and other departments officials had discussed the detailed presentations of the contestants and finally decided to give the job for global Sukuk to the Standard Chartered Bank and for the local Sukuk to the Mezan Bank-led consortium.

The Sukuk bond floating is a part of PIA''s restructuring plan to make this national flag carrier financially strong and take a big leap forward to gain more international market.

The government had approved a restructuring plan for PIA sometimes back. Market analysts are of the view that since the Sukuk bond will be interest-free on sale-purchase principle, the PIA issue is going to get good response from the local as well as international market. They also believe that PIA will be in much comfortable position in terms of financial requirements after raising money through Sukuk.