March 27 (Reuters) - Turkey’s state grain board TMO and construction firm Gap Insaat have received regulatory approval for debut sales of Islamic bonds, or sukuk, as the funding format gains favour to tap local and Gulf investors.
Turkey has seen steady issuance of sukuk from the government and the country’s Islamic banks, known domestically as participation banks, but an increase in corporate issuance could help tap into a much wider stable of issuers.
The TMO will raise 150 million lira ($41.6 million) via a sukuk that will be arranged by Islamic lender Kuveyt Turk, majority-owned by Kuwait Finance House, according to the country’s Capital Markets Board.
The TMO is a quasi-autonomous state enterprise responsible for regulating grain markets in Turkey, including wheat, barley, corn and rice.
Gap Insaat, the contruction arm of conglomerate Calik Holdings, will sell a rare dollar-denominated deal worth $118.4 million to be arranged by Aktif Bank. The firm has operations in Qatar, Saudi Arabia, Iraq and Turkmenistan.
Turkey is seeking to build a bigger role in the industry and forge closer ties with fast-growing economies in the Gulf and southeast Asia, the traditional centres of Islamic finance.
Last week, the Turkish Treasury hired banks to arrange a sale of sukuk in the international markets, with meetings set to begin this week in the United Arab Emirates.
The sovereign last issued dollar-denominated sukuk in June of last year, with a $1 billion five-year deal. ($1 = 3.6023 liras) (Reporting by Bernardo Vizcaino:; Editing by Kim Coghill)