Dana Gas refuses to redeem $700m sukuk

Dana Gas refuses to redeem $700m sukuk
The case is projected to resume by 13 November
Dana Gas DANA -1.37% 0.72 -0.01

Abu Dhabi – Mubasher: Dana Gas will not redeem its disputed $700-million sukuk upon maturity date, Reuters reported on Tuesday, citing an informed source as saying.  

Claiming that there were changes in the interpretation of Islamic finance in the current years, Dana stated that these sukuk were not sharia-complaint and, therefore, deemed unlawful in the UAE.

Courts in the UK and UAE issued injunctions in June, which prevent sukuk holders from declaring a debt default pending a court judgment.

“The case is being closely watched by the global Islamic finance industry because some investors think it could set a precedent for other sukuk issuers,” Reuters reported.

However, Dana Gas objected that argument, saying that its sukuk’s mudaraba structure differs from most Islamic bonds in the market, Reuters added, citing a “source close to the situation”.  

Earlier this month, High Court judge George Leggatt adjourned the case to enable Dana Gas to appeal against an injunction granted by the Sharjah court, which prevents the company from taking part in the London trial.

The case is projected to resume by 13 November, when a ruling may be issued, informed sources told the news agency.

Last week, Dana requested an early hearing from the Sharjah court for an appeal to allow the company to participate in London trial, Reuters concluded. 

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Source: Mubasher

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