Dubai: Dana Gas PJSC has reached an agreement with key holders of $700 million (Dh2.6 billion) of its Islamic bonds to restructure the securities, two people with knowledge of the matter said, possibly ending a legal battle that has unnerved the Islamic finance industry.

A committee representing sukukholders, which include BlackRock Inc and Goldman Sachs Group Inc, agreed to accept an immediate cash payout of 20 cents to the dollar and to roll the rest into a three-year security, said the people, asking not to be identified because the information isn’t public. A spokesman for the Sharjah-based energy company said it won’t comment on rumours or speculation.

Here are more details of the agreement:

The agreement potentially ends a debt saga that started a year ago, when the company first announced it would restructure the notes due to delays in gas payments from Egypt and Iraq’s Kurdish region. A month later, the company said it no longer considered its two $350 million mudaraba sukuk to be compliant with Sharia and proposed replacing them with new securities that yield less than half the average current profit rate of 8 per cent.

It then retracted that offer, opting to go to court instead, and didn’t settle the sukuk when they matured in October. The company had a string of rulings against it in the UK, while the British and UAE courts have announced conflicting judgements on its planned dividend payments.

Investment bank Houlihan Lokey Inc is advising Dana Gas and Moelis & Co is the consultant to the committee of sukukholders.