x Abu Dhabi, UAESunday 21 January 2018

Dana Gas rebounds despite missed bond deadline

Abu Dhabi-listed shares jump by 4.8 per cent, as sources close to the company say a standstill agreement is in place over sukuk.

Dana Gas shares jumped 4.8 per cent as markets began trading after the company said it had missed a payment deadline for a $920m bond.

The sukuk matured at midnight yesterday, but Dana Gas remains in negotiations with creditors.

Sources close to the company said on Tuesday that a six-month standstill agreement is in place with lending banks.

A standstill is an agreement among creditors that they will not press claims against a company over its outstanding debts, averting a default.

"The desirability to amend and extend the terms of the sukuk became evident in the interests of all stakeholders owing to the recent liquidity challenges that have emerged as a result of challenging external macro-economic and political circumstances in the region, including the extensively reported problems of payment delays where the company operates," Dana Gas said in a statement.

"Until this date, the company has consistently honoured its payment obligations," the company added.

Dana’s Abu Dhabi-listed shares rose as much as 4.8 per cent to Dh0.43 each in early trading, but later pared gains.

The Sharjah-based company also reported net income of Dh104 million (US$29m) in the third quarter of this year, a decline of 27.2 per cent compared with the same period last year, driven by a fall in sales.

The company's revenues fell by 20.6 per cent to Dh512m during the same period.

"Dana Gas remains committed to finding a consensual solution that is fair and equitable to all stakeholders and will make further announcements in line with the progress of discussions," the company added.