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  • October 1999 (Revised April 2003)
  • Case
  • HBS Case Collection

International Investor, The: Islamic Finance and the Equate Project

By: Benjamin C. Esty and Mathew M Millett
  • Format:Print
  • | Pages:22
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Abstract

Equate Petrochemical Co. (Equate) is a joint venture between Union Carbide Corp. and Petrochemical Industries Co. (PIC) for the construction of a $2 billion petrochemical plant in Kuwait. The sponsors began construction in August 1994, using a bridge loan, and are in search of permanent, nonrecourse finance. As part of the permanent financing, the sponsors want to use a tranche of Islamic finance--funds that are invested in accordance with Islamic religious principles known as Sharia. The sponsors hired Kuwait Finance House which, in turn, approached The International Investor (TII is a Kuwaiti investment bank) to assist in structuring and underwriting the Islamic tranche. The case is set in early December 1995, as members of The Institutional Investor's Structured Finance Group are deciding which Islamic structure to use, how to resolve various conflicts between the Islamic and conventional tranches, and how large a commitment to make on behalf of their investors.

Keywords

International Finance; Project Finance; Religion; Investment; Finance; Mining Industry; Energy Industry; Kuwait

Citation

Esty, Benjamin C., and Mathew M Millett. "International Investor, The: Islamic Finance and the Equate Project." Harvard Business School Case 200-012, October 1999. (Revised April 2003.)
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About The Author

Benjamin C. Esty

Finance
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  • Tempur Sealy International (A, B & C) By: Benjamin C. Esty and Daniel Fisher
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