Dana Gas, the Middle East’s largest regional independent natural gas company, said on Wednesday that it obtained an injunction from the Sharjah Federal Court of First Instance blocking claims for payments on its $700 million of outstanding sukuk.
In a statement, the company said the court has issued an injunction pending determination of the company’s application to have its sukuk dated May 8, 2013 declared unlawful and unenforceable. “An initial hearing has been scheduled on December 25 2017,” the company said in a statement posted on Abu Dhabi Stock Exchange’s website.
“The injunction restrains ... from taking any action, inside or outside the United Arab Emirates, to enforce against any of the securities of the Company and its affiliates under the Company’s Security Agreement until a final determination is made by the Court in the lawsuit,” the statement added.
Dana Gas, which is listed on ADX announced on Tuesday that it plans to restructure a $700 million of Islamic bonds to conform with the relevant laws on Tuesday.
Under the new arrangement, the company proposed to exchange the sukuk with a new enforceable, Sharia compliant instrument, which would have a tenor of four years, confer rights to profit distributions at less than half of the current profit rates and without a conversion feature.
Reacting to the developments, Sanyalaksna Manibhandu, head of research at NBAD Securities told Gulf News if the existing sukuk signed in May 2013 is non-Sharia compliant then it cannot be enforced.
“The company has been advised on this and they want to protect from any litigation arising due to the latest developments,” Manibhandu said.
The company is also in the process of collecting over $900 million of total receivables due from the KRG (Kurdistan Regional Government) and Egyptian government.
On June 7, Dana Gas announced the new payment of $40 million towards its outstanding receivables in Egypt taking the total amount received to $135 million with $187 million still pending.
Dana Gas shares closed 1.45 per cent lower at Dh0.68.