ABS & Co advised on the structuring and documentation of a PKR 520 million Shariah-compliant financing facility for the manufacture and supply of air-conditioning units, reinforcing the firm’s leading role in Islamic finance and structured financing transactions in Pakistan.
The transaction involved the design and implementation of an integrated Istisna–Wakala structure tailored to meet both the commercial requirements of the borrower and the Shariah compliance expectations of the financiers. Under the structure, financiers entered into an Istisna’ agreement for the manufacture of approximately 4,000 air-conditioning units, followed by a Wakala arrangement to facilitate the onward sale, deployment, and utilization of the manufactured assets.
ABS & Co played a central role in structuring the transaction, with particular focus on the sequencing and interlinking of the Istisna’ and Wakala arrangements to ensure strict compliance with Islamic finance principles while maintaining commercial viability. The mandate required careful calibration of asset identification, ownership transfer mechanics, and deferred payment obligations to ensure that the facility functioned as an effective Shariah-compliant alternative to conventional working capital financing.
The firm advised on key structuring considerations, including profit mechanics (as distinct from interest/riba), risk allocation, and the legal characterization of agency arrangements within the framework of Pakistani banking and regulatory laws. The transaction reflects the growing demand for Shariah-compliant working capital solutions in Pakistan’s manufacturing and industrial sectors, particularly in light of increasing regulatory and constitutional emphasis on interest-free financial systems.
ABS & Co drafted and negotiated the complete suite of Islamic finance documentation, including Istisna’ agreements, Wakala agreements, agency undertakings, payment schedules, and all ancillary security and compliance documentation. The firm ensured that the documentation framework was robust, enforceable, and aligned with both Shariah standards and applicable regulatory requirements in Pakistan.
This transaction highlights ABS & Co’s expertise in complex Islamic finance structures, including Istisna financing, Wakala arrangements, and bespoke Shariah-compliant lending solutions for corporate clients, financial institutions, and high-net-worth individuals.
The matter was led by Partner Bakhtawar Bilal Soofi, with support from Associate Zain Kashif.
