Abu Dhabi – Mubasher: Dana Gas’ one-year-long sukuk battle may have come to an end.
On Sunday, sources told news agency Bloomberg that the Abu Dhabi listed gas company may have reached an agreement with its $700 million sukuk holders.
“A committee representing sukuk holders, which include Blackrock and Goldman Sachs Group, agreed to accept an immediate cash payout of 20 cents to the dollar and to roll the rest into a three-year security,” Bloomberg reported, citing the sources as saying.
In June 2017, Dana Gas said it was unable to repay its sukuk holders because of delayed payments from Egypt and the Kurdistan Region of Iraq. However, the UAE firm later said that its two $350 million murabaha Islamic bonds did not conform to the Islamic Shariah and therefore needed to be restructured.
After the announcement that the sukuk did not comply with Islamic Shariah, Dana proposed replacing the sukuk with new ones that yielded less than half the average 8% rate it was offering for the original sukuk.
Dana Gas then “retracted that offer, opting to go to court instead,” the news ageny added. The UAE-based gas firm did not settle the sukuk when they matured in October.
Since June, Dana Gas has been in a legal battle in the UAE and the UK over its sukuk. Conflicting rulings were issued by the courts of the two countries regarding the dividend payout of these sukuk.
“The new security will pay an annual coupon of 4%. Bondholders agreed to remove the convertible option in the securities Dana Gas said it would pay a further 20% of the sukuk after two years and will raise the coupon to 6 percent if it fails to do so. The majority of sukuk holders have agreed to the terms,” the news agency added.