Text size:

  • Small
  • Normal
  • Large
Dana Gas announced its first gas discovery in Egypt this year. WAM
Dana Gas announced its first gas discovery in Egypt this year. WAM

Standstill reached on Dana Gas sukuk

Dana Gas has reached a six-month standstill agreement with bondholders over US$920 million (Dh3.37 billion) worth of Islamic bonds maturing today.

Dana Gas has reached a six-month standstill agreement with bondholders over US$920 million (Dh3.37 billion) worth of Islamic bonds maturing today.

"A six-month standstill is happening. There is no white knight," said a source familiar with the matter. "All parties are progressing discussions."

An official filing is due to be released from the company today when the sukuk matures, the source said.

Dana Gas declined to comment.

HSBC, which is the trustee for the sukuk and would declare a default if it occurred, said that the company could invoke a three-day grace period after the bond matured if it was unable to repay in time.

If a restructuring agreement materialises, investor speculation will turn to whether or not bondholders will take a haircut and to the eventual terms of repayment.

The Sharjah-based gas explorer and producer has suffered payment delays from its operations in Egypt after the revolution last year, and in Iraqi Kurdistan amid a continuing dispute between Erbil and Baghdad.

Dana tumbled 4.2 per cent to close at 43 fils on the Abu Dhabi Securities Exchange yesterday. The shares, however, fell as much as 8.5 per cent during the trading session.

The sukuk, originally $1bn, was issued with a 7.5 per cent coupon to investors. Dana paid about $80m of the sukuk back in 2008 leaving $920m outstanding today. The company's six-month standstill agreement with bondholders was agreed upon early this month, the source said.

"They are buying more time. It's not the best result, but it's not a hugely bad result," said Mohammed Ali Yasin, the managing director of National Bank of Abu Dhabi's brokerage arm.

"People were hoping for it to be paid now. The fact that there's an agreement means they [Dana and creditors] are on the same wavelength. Dana didn't come and say 'we are in default'."

Dana's shares rose 30 per cent last month, trading from as low as 37 fils to 48 fils, amid investor speculation that an agreement would be reached by yesterday.

"There has been capital appreciation in anticipation of an agreement," said Mr Yasin. "Investors bought it to sell it once a decision was made. They knew the limit was one month. Now those who bought it with the expectation of one month are not happy. That's why there's a pullback."

Saleem Khokhar, the head of equities at National Bank of Abu Dhabi, said the result had been expected by the financial community.

"There was no way they were going to be able to pay in time," he said. "The only thing that mattered was how they were going to restructure the bond. It was always going to be about refinance."

halsayegh@thenational.ae

ghunter@thenational.ae

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National