Dana Gas reportedly reaches settlement agreement with sukuk holders - ENTERPRISE

Sunday, 13 May 2018

The UAE’s Dana Gas appears to have reached a settlement agreement with holders of its USD 700m sukuk. “A committee representing sukuk holders, which include BlackRock Inc. and Goldman Sachs Group Inc., agreed to accept an immediate cash payout of USD 0.20 to the USD and to roll the rest into a three-year security,” sources with knowledge of the matter tell Bloomberg. The agreement would bring the Sharjah-based producer’s court case with its Islamic bond holders to an end.

Here are more details of the agreement:

• The new security will pay an annual coupon of 4 percent
• Bondholders agreed to remove the convertible option in the securities
• Dana Gas said it would pay a further 20 percent of the sukuk after two years and will raise the coupon to 6 percent if it fails to do so
• The majority of sukukholders have agreed to the terms

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 Islamic law and proposed replacing them with new securities that yield less than half the average current profit rate of 8 percent.

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 U.K., while the British and U.A.E. courts have announced conflicting judgments 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.

SOURCE / SOURCE2