DUBAI
Holders of $700 million of Islamic bonds issued by UAE-based Dana Gas expect to recover all the money owed to them under the bonds’ original documentation, a committee representing the holders said on Thursday.
The committee issued its statement after a London High Court judge again ruled in favour of holders on Feb. 1, rejecting an attempt by Dana to overturn his decision last November that the purchase undertaking behind the sukuk was valid and enforceable.
Last June, Dana refused to redeem its sukuk on the grounds that they were no longer Sharia-compliant and therefore unlawful in the UAE. That has led to a protracted legal battle in British and UAE courts.
The sukuk holders said on Thursday that in addition to his decision to uphold the purchase undertaking, the London High Court judge had issued an injunction requiring Dana to withdraw its legal proceedings and injunctions in the UAE.
The court also directed that an injunction preventing sukuk holders from enforcing claims against Dana under the purchase undertaking would expire on March 29, and ordered the company to pay sukuk holders’ legal costs, the statement said.
As a result, “We now look forward to payment in full of the amounts owed to the certificate holders as per the Purchase Undertaking, and drawing these legal proceedings to a close,” the statement said.
A company spokesperson said Dana Gas found the statement “misleading” and that it regrets the committee’s “continuing aggressive stance”.
“Ultimately, whether any payment has to be made under the Purchase Undertaking depends on the determination of the UAE law issues” and the application of the Mudarabah agreement — the Islamic finance structure which regulates Dana’s sukuk — which is governed by UAE law, and these matters are still under litigation, the spokesperson said.
The company is in the process of appealing the decisions of the London High Court judge, the spokesperson added.
The sukuk holders’ statement came after several weeks of talks between the company and at least some of its creditors failed to reach an out-of-court settlement.
About two weeks ago, Dana submitted a new proposal to restructure the sukuk to creditors, who rejected it because they felt the terms were unfavourable, sources familiar with the matter told Reuters this week.
The company had offered to redeem 10 per cent of the sukuk in cash and to roll over the remaining 90 per cent over four years at an annual profit rate of 4 per cent. It also offered to buy back up to half of the bonds at a 15 per cent discount.
