APIC's New Corporate Bonds: A Strategic Financial Move Amidst Challenges

APIC Issues New Corporate Bonds

The Arab Palestinian Investment Company (APIC) has recently announced the successful issuance of new five-year corporate bonds. This financial maneuver, conducted through three tranches, is notable for its total nominal value of USD 120 million, which includes bonds denominated in US dollars, Jordanian Dinars, and Euros. The varying denominations of these bonds highlight APIC's adaptability in different financial markets.

The issuance was held in collaboration with nine major banks and financial institutions, such as Arab Bank, Cairo Amman Bank, and the International Finance Corporation (IFC). This initiative aims to strengthen APIC’s financial foundation and to support its investments in key sectors across Palestine and beyond.

Confidence in APIC's Vision

Tarek Aggad, the Chairman and CEO of APIC, remarked on the significance of this bond issuance. During a press conference, he emphasized that this move represents a strategic reinforcement of APIC's capital structure. The robust response from investors, with subscriptions totaling USD 126.144 million—far exceeding the initial offering of USD 110 million—demonstrates a strong vote of confidence in the company, especially given the ongoing humanitarian and economic challenges in the region.

Aggad also expressed appreciation to all institutions that participated in this bond subscription. He noted that many of the banks involved in earlier bond issuances from 2012 to 2020 renewed their commitments, underscoring their trust in APIC.

Subscription Agreement with the IFC

A significant highlight of this issuance was the formal agreement between APIC and the IFC, where the latter subscribed to APIC bonds worth USD 15 million. This agreement, signed by both Aggad and Ashruf Megahed from IFC, is propitious for enhancing financial collaboration between the two entities. The partnership showcases the IFC's commitment to supporting private sector growth, particularly in regions facing economic instability.

Aggad expressed pride in IFC's investment as it reflects confidence in APIC’s governance and operational resilience. The due diligence process preceding this agreement was rigorous, showcasing APIC’s adherence to high standards in governance, financial management, and social responsibility.

Impact on Palestinian Economy

This bond issuance is poised to have a wider impact on the Palestinian economy. By bolstering its capital structure, APIC aims not only to recover from current economic setbacks but also to create job opportunities across various sectors. As noted by Megahed, the investment stands as a testament to the IFC's commitment to fostering private sector initiatives in challenging economic environments, which can serve as a catalyst for sustainable growth in Palestine.

APIC's Operations and Investments

APIC is a publicly traded investment company on the Palestine Exchange, with a diversified portfolio spanning manufacturing, trade, distribution, and services in Palestine, Jordan, and other Middle Eastern countries. It manages several subsidiaries, employing over 3,400 individuals. This extensive network of operations positions APIC favorably for future growth, even as it navigates complex regional challenges.

As APIC continues to solidify its capital through initiatives such as this bond issuance, it further exemplifies the resilience and ambition of Palestinian enterprises in the global market.

For more detailed information, APIC has provided updates on their official website at apic.ps.