DUBAI
Abu Dhabi-listed Dana Gas aims to communicate proposed terms of a restructured sukuk issue in coming weeks, chief executive Patrick Allman-Ward said on Thursday.
Allman-Ward was speaking on a conference call to brief holders of the company’s $700 million of outstanding sukuk, which will mature in October. There was no question and answer session in the call.
“The company would look to communicate to the market the terms for a new restructured sukuk instrument and the process for holders to participate in such a legal and enforceable instrument over the coming weeks,” he said.
In mid-June, Dana stunned creditors by announcing it would halt payments on the four-year sukuk because they no longer complied with changing interpretations of Sharia, and had thus become unlawful in the United Arab Emirates.
Dana said it wanted to exchange the sukuk for new Islamic instruments with lower profit rates than its existing paper.
On Thursday, Allman-Ward did not provide significant new detail of Dana’s plan beyond what it revealed in its mid-June statement. He said, however, that profit rates on the new sukuk would have to reflect changes in the global bond market since the existing paper was issued, as well as improvement in Dana’s financial outlook.
“The global high-yield environment has materially changed since 2012, with high-yield index prices increasing by 25 to 30 per cent over the period.
“Applying this to our sukuk coupon rate would itself indicate a new issue yield of below 4 per cent,” he said. The existing paper, half of which is convertible into equity, features profit rates of 7 per cent and 9 per cent.
