Dubai: Dana Gas PJSC has reached an agreement with key holders of $700 million (Dh2.5 billion) of its Islamic bonds to restructure the securities, seeking to end a legal battle that unnerved the Islamic finance industry.
A committee representing sukukholders, including BlackRock Inc. and Goldman Sachs Group Inc, have agreed to terms that include two options for creditors, the company said in a statement. Dana Gas and creditors also entered into an agreement to dismiss all pending litigation.
“The proposed new sukuk instrument to be issued to sukukholders has been legally verified to be lawful without question,” Dana Gas Chief Executive Officer Patrick Allman-Ward said in the statement.
The agreement ends a debt saga that started a year ago, when the company first announced it would restructure the notes due to delays in payments from Egypt and Iraq’s Kurdish region. A month later, Dana Gas 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.
Sukukholders representing more than 52 per cent of the aggregate amount of the existing exchangeable certificates and more than 30 per cent of the existing ordinary certificates have agreed to the terms. Dana Gas will seek approval from the remaining debt holders, with a view to start the tender offer and consent solicitation process this month.
