By: Mahmoud Gamal
Abu Dhabi – Mubasher: The UAE stock markets are anticipating the results of Dana Gas' conference call with holders of its Mudarabah sukuk on 6 July, amid expectations that the company will pass through a stumbling stage if it does not reach a solution for its debts.
The company will communicate with its broad sukuk holder group, and provide information regarding the planned restructuring, including background on the declaration of the current sukuk’s unlawfulness, the proposed solution for the way forward, and the steps that the company has to take to protect its position.
Dana should engage in negotiations with its sukuk holders, worth $700 million, to resolve the issue as its current liquidity does not exceed $400 million, analysts told Mubasher.
The company seeks to prolong the negotiations period especially since it did not obtain all its arrears from countries like Egypt, but this may lead creditors to raise the ceiling of demands locally and internationally, analysts added.
A long negotiations period may lead creditors to raise the ceiling of demands locally and internationally, to be offered as many good conditions as possible regarding the restructuring of debts, according to Wadah Al Taha, member of the National Advisory Board of Chartered Institute for Securities & Investments (CISI).
Resorting to take judicial proceedings to prevent sukuk holders from asking for their rights confirms that Dana cannot find a way out of the current issue, according to Al Taha.
This invitation for the call conference comes after the ad-hoc committee representing sukuk holders rejected the company’s proposal to exchange the sukuk due in October with a new enforceable, Sharia-compliant instrument, which would have a less tenor of four years.
The delay in payments from Egypt, Iraq, and Iran created a crisis that will not be solved except through negotiations with sukuk holders, Al Taha added.
Translated by: Julian Nabil