A committee of the holders of some $700 million (Dh2.56 billion) in Islamic bonds issued by Dana Gas has appointed New York-based boutique investment bank Moelis and US legal firm Weil, Gotshal & Manges to negotiate restructuring of the notes, sources familiar with the matter said on Wednesday.
With a cash balance of around $300 million at end-March and the sukuk due to mature in October this year, the Abu Dhabi-listed energy producer said earlier this month that it intended to hold discussions with its creditors.
Dana and Moelis declined to comment on Wednesday. Dana has not yet appointed an adviser for the restructuring, said a source close to the company.
Dana’s sukuk, issued in 2013, comprise convertible paper with a 7 per cent profit rate and non-convertible sukuk with a 9 per cent profit rate.
The 7 per cent paper has stabilised at a cash price of 86 cents on the dollar since mid-March and has become illiquid since then. The 9 per cent sukuk, with a cash price of about 85 cents, was yielding 51 per cent on Wednesday.
Dana has faced a cash shortage caused by a lack of payments from its assets in Egypt and Iraq’s Kurdistan, due to political and economic instability as well as a legal dispute in Kurdistan. The company says it is owed receivables of roughly $1 billion by Egypt and the Kurdistan Regional Government.