Simmons & Simmons has advised Vodafone Qatar on the successful refinancing of US$330m of conventional external borrowings with a Shariah compliant 'Wakala' investment agreement.

The transaction has a tenure of 5 years and will be used for working capital and capital expenditure. The refinancing is unique, being Vodafone Group's first Shariah compliant intercompany financing. Vodafone Qatar has also reported that, effective from 01 January 2015, it commenced the implementation of Shariah rules and practices in all of its operations.

It has been reported that in the eight days of trading that followed the switch to Islamic finance, Vodafone Qatar’s shares (which are listed on the Qatar Stock Exchange) jumped 22%, in the heaviest turnover for over a year.

Simmons & Simmons partner and head of the firm's Middle East financial markets and global Islamic finance practices, Muneer Khan, commented: “this transaction shows the added benefits and incentives for businesses to adopt Islamic finance. As well as tapping an alternative source of finance, companies which convert their funding and operations to a Shariah compliant model can also potentially attract additional investment from a large and growing pool of Islamic equity investors. The team at Simmons & Simmons worked closely with Vodafone Qatar and its other advisors to execute this transaction in a timely and efficient manner. We expect other leading international and regional corporates to follow suit.”

Vodafone Qatar’s chief financial officer Steve Walters continued: “the company's new policy included refinancing US$330m worth of debt and the decision is a long-term commitment by the firm. The move is permanent and we intend to amend our bylaws to include adherence to Sharia standards, which will continue to have a positive impact in all future commercial and financial activities.