UAE: Dana Gas restructures Islamic debt
One of the largest private sector natural gas company in Middle East, Dana said the agreement was signed with the Ad Hoc committee of sukukholders, which represents majority of outstanding principal amount of the existing sukuk.
The shareholders are set to vote on sukuk deal in the first quarter of 2013. Dana, which was floated on the Abu Dhabi bourse in 2005 by parent Crescent Petroleum, had a $1 billion sukuk maturing on October 31. It repurchased about $80 million of the sukuk in 2008, leaving $920 million outstanding. The Sharjah-based firm could not repay the sukuk upon its October 31 maturity.
The company and bond holders then entered into a so-called standstill, valid for up to six months, in early October to allow talks to continue. As per the terms of the agreement, Dana Gas will cut the outstanding debt from $1 billion to $850 million via $70m cash pay-down and cancellation of another $80 million of the existing sukuk already owned by the company.
The $850 million will be split into two tranches – a $425 million ordinary sukuk and $425 million convertible sukuk, each with 5-year maturity to ensure long-term financing, said the UAE company.
Announcing the detailed terms for the refinancing transaction with regard to its 7.5 per cent Sukuk-al-Mudarabah, Dana said the average combined profit rate on the two sukuks is 8 per cent, representing a slight increase over the existing sukuk profit rate of 7.5 per cent. Commenting on the deal, Dr Adel Khalid Al Sabeeh, the chairman of Dana Gas board said the terms represented a comprehensive, long-term solution which balances the interests of all stakeholders.