Abu Dhabi – Mubasher: Dana Gas on Sunday announced reaching an agreement with the Ad-Hoc committee of Sukuk holders over the terms and conditions of the restructuring and refinancing of its $700 million Sukuk Al-Mudarabah.
As of Sunday, over 52% of the “aggregate amount of the existing Exchangeable Certificates and in excess of 30% of the existing Ordinary Certificates have entered into a binding lock-up and standstill agreement with the company in connection with the mutually agreed proposed restructuring,” Dana said in an official statement.
Dana Gas and the Ad-Hoc committee of Sukuk holders have entered into a Litigation Dismissal Agreement, which provides a mechanism for the dismissal of all pending litigation and a release of certain claims, it added.
The “consensual transaction” is a means to amicably resolve all current and outstanding issues between the company and its sukuk holders.
Under the agreement, sukuk holders who which to exit their investment will be offered the opportunity to tender their claims at 90.5 cents per $1 of the face value of their holdings, which includes an early participation fee of 2.5 cents. This is opportunity is “capped at 25%” if “elections are received within seven days from the date of launch of the Tender Offer and Consent Solicitation process,” Dana stated.
As for sukuk holders who prefer to receive a partial pay down and exchange into a new instrument, the Abu Dhabi-listed gas company said that it was offering a “full recovery including a significant repurchase obligation at par with respect to the new certificates. Such holders will also receive arrears of profit distribution as per the Existing Certificates up till 31 October 2017, and a 4% profit rate from 01 November 2017 till closing of the transaction.”
If elections are received within seven days from the date of launch of the Tender Offer and Consent Solicitation process, holders will receive an early participation fee of 2.5 cents, the firm added.
Under the terms of the agreement, the new certificates will be “constituted of a Wakala Sukuk instrument (based on an underlying Ijara and deferred payment obligation structure) which has a 4% profit rate and three-year tenor,” the statement indicated.
Dana stressed that its consensual agreement was “contingent” on several conditions being satisfied. These include the payment of costs of certain parties and termination of all current litigation as well as a release of certain claims.
Dana Gas described the near-year-long litigation as “value-eroding to all stakeholders”.
“Dana Gas believes that the offer reflects the Company’s significantly improved financial position at about 0.3 times net leverage, and removes the risk to all parties of continuing lengthy legal disputes in multiple jurisdictions,” the company stated.
Commenting on Dana Gas’ agreement with its sukuk holders, CEO Patrick Allman-Ward said that he was pleased his company was able to reach an amicable deal.
Such an amicable deal had been the Dana Gas’ “intention from the outset”, he said, adding that the agreement “offers Sukuk holders the opportunity to cash out at a premium to current market prices or – individually solely at their election – to achieve a path to full repayment of the face value of their existing holdings.”
“The proposed new Sukuk instrument to be issued to Sukuk holders has been legally verified to be lawful without question,” the CEO emphasised.
Dana Gas expects the deal to be completed by the first half of July 2018. It also plans to schedule an ordinary general meeting (OGM) next month for shareholder approval to the terms of the sukuk agreement.
Earlier on Sunday, Bloomberg reported, citing unnamed but informed sources as saying that the Abu Dhabi-listed gas company had reached an agreement with the holders of its $700 million sukuk.
In June 2017, Dana said it was unable to repay its sukuk holders because of delayed payments from Egypt and Kurdistan. It later said that its sukuk did not conform to the Islamic Shariah and therefore needed to be restructured. It then Dana proposed to replace the sukuk with lower-yielding ones, which was refused by holders.
Dana Gas then retracted the offer, and went to court. Since July last year, UAE and UK courts have issued conflicting rulings for the company.