Dana Gas Co, the first UAE company to fail to meet a bond redemption, said on Wednesday it reached an “in principle” restructuring agreement with creditors to repay the $1 billion Islamic bond, or sukuk.
Natural gas producer Dana, headquartered in the emirate of Sharjah, said in a statement that it will cancel $80 million of the Islamic bond currently held by the company and sukuk holders will receive a partial paydown in cash from Dana.
It did not say how much cash it was paying bond holders. The remaining amount of the sukuk will be split between a new ordinary sukuk and a new convertible one with revised economic terms, Dana said. It did not provide additional details.
“We are very pleased to have reached an agreement, which we believe best preserves the interests of all stakeholders,” Dana Chairman Adel Khalid Al-Sabeeh said in the statement.
The company said it had entered into a standstill agreement with the creditors committee. The sukuk matured on Oct. 31. Dana repurchased about $80 million of the sukuk in 2008, leaving $920 million outstanding.
Dana’s problems started after the company was hit by payment delays on the gas it supplies to Egypt and Iraq’s Kurdistan region. Its shares have slumped on the Abu Dhabi bourse since Reuters reported last week that the company was set to miss the repayment deadline.
The sukuk is said to be held by large investment firms like BlackRock Inc and Ashmore Group.
In a separate statement, the Abu Dhabi bourse halted trading in Dana Gas shares.
Reuters
