Sharjah: Dana Gas said it’s committed to find a “consensual solution” on a $1 billion Islamic bonds maturing in two months as its trade receivables increased.
“The company is committed to finding a consensual solution that is equitable to all stakeholders,” the Sharjah-based company said in a statement to the Abu Dhabi stock market on Monday. “The company will provide further updates as further progress is made.”
The yield on its 7.5 per cent notes maturing October 31 has soared this year on concern about Dana Gas’s ability repay and after its biggest shareholder, Crescent Petroleum, said it has no plan to provide cash to the gas producer. The notes slumped to 70.12 cents to the dollar on Monday, lifting the yield to a record 217 per cent, according to data compiled by Bloomberg.
Dana Gas has appointed Deutsche Bank, Blackstone Group and Latham & Watkins to advise on the sukuk. Bondholders of the Islamic debt hired London-based law firm Linklaters LLP to negotiate a restructuring, three people familiar with the matter said in May. The sukuk is secured against the company’s Egyptian assets as well as Sajaa Gas Private and United Gas Transmissions, part of a venture to supply Iranian gas to the UAE that is yet to start.
Trade receivables, money owed to the company, increased to $535 million in June from $475 million at the end of last year, Dana Gas said on Monday. It had cash and cash equivalents of $164 million at the end of second quarter compared with $112 million six months earlier.
Profit climbs
Second-quarter profit climbed 46 per cent to Dh181 million ($46 million) from the year-earlier period as investment income increased and income-tax expenses fell. EFG-Hermes Holding SAE estimated a profit of Dh183 million, according to data compiled by Bloomberg.
Revenue declined to Dh554 million from Dh627 million a year earlier, while oil and natural-gas production fell to 60,950 barrels of oil equivalent a day from 65,600 a year earlier.
“The revolution in Egypt last year and the subsequent unfolding turmoil resulted in sporadic and progressively delayed payment of revenue by government-owned entities,” Dana Gas said. “Similarly, political disputes in Iraq have impacted planned payments by the central government to petroleum companies operating in the Kurdistan Region of Iraq.”
The shares closed 2.5 per cent lower at 39 fils in Abu Dhabi before the results were announced, giving the company a market value of Dh2.57 billion. The shares have tumbled 13 per cent this year compared with a 6 per cent increase for the benchmark ADX General Index.