Dubai: Talks to resolve a dispute between Dana Gas and holders of $700 million (Dh2.57 billion) of Islamic securities broke down after the company proposed a 15 per cent haircut on some of the debt, according to two people familiar with the matter.

The Sharjah-based energy company suggested buying back about $200 million at 85 cents to the dollar, and rolling over the rest into new securities with a profit rate of 4 per cent, the people said, declining to the identified because the talks are private.

Bondholders, which include Goldman Sachs Group Inc and BlackRock Inc, want the buyback to be at par and the profit rate to be higher, the people said. Dana Gas declined to comment when contacted by email.