The multi-million-dollar business of aircraft leasing is taking off in the Gulf, with investors being wooed to pump $200 million into a pioneering venture undertaken by leading Saudi businessmen.

The promoters are seeking the funds to launch the Islamic Aircraft Leasing Company (IALC), which is to operate according to Islamic financial laws, officials and a bank advising the project said.

The offering of $200 million equity began in June and will end on September 6. The minimum subscription is $1 million.

IALC plans to provide 15 to 20 aircraft which will be leased to credit-worthy airlines, the Bahrain-based Gulf International Bank (GIB) said in a statement.

GIB and Ernst & Young are the financial advisers for the IALC and placement agents.

"The shares in IALC ... are targeted primarily at institutions, which are then expected to offer units or participations to their investors and depositors," the bank said.

The statement said sponsors included Shaikh Abdul-Aziz Al Sulaiman, the former vice-president of Jeddah Chamber of Commerce, and Shaikh Hamad Al Sulaiman, who heads a Saudi private company.

The portfolio is to be managed by Geneva-based Novus Management, a company that has several years of experience in aircraft management and leasing, the statement said.

Islamic financial principles ban the payment of interest but allow sharing profits with investors and depositors.