Shares hit high for the year on resumption of trading after Eid holiday
Dana Gas shares surge to highest this year thanks to $1bn KRG settlement
Shares in Dana Gas soared to their highest level of the year in morning trading yesterday, following the settling of the energy firm’s long-running dispute with the Kurdistan Regional Government (KRG).
Dana’s stock leapt 14 per cent to 73 fils in Abu Dhabi, as the UAE’s bourses resumed trading after the Eid Al Adha holiday. Nearly 100 million Dana stocks changed hands in the first two hours of trading, accounting for more than two-thirds of total trade on the Abu Dhabi exchange.
The energy firm announced on Friday that it had reached a settlement in its London-based arbitration with the KRG, which the Sharjah-based company initiated in conjunction with its partners in the Pearl Consortium in 2013.
The consortium accused the KRG of blocking further development on the region’s Khor Mar and Chemchemal fields and underpaying for gas supplies.
Under the terms of the settlement, the KRG has agreed to pay the consortium – whose other members include Dana’s parent company Crescent Petroleum – a sum of US$600 million, together with a $400m payment to be allocated towards the consortium’s further investment in the region’s gasfields.
The $1.24 billion balance of the amount awarded by the London Court of International Arbitration has been reclassified as outstanding costs, recoverable from future revenues generated.
The deal with the KRG comes as Dana remains locked in a dispute with its creditors over $700m worth of outstanding sukuk, which the company is trying to restructure. Discussions with sukuk holders soured earlier this year when Dana claimed the outstanding sukuk were not Sharia-compliant, and therefore were illegal under UAE law.
The company said in late July that it would pursue a litigation driven-outcome with creditors, taking out injunctions against calls for payment in Sharjah and London.
The high volume of trades in Dana shares was the highlight of an otherwise quiet day for shares in both Abu Dhabi and Dubai, with other stock markets across the Arabian Gulf remaining closed for the Eid holiday.
Eshraq Properties shares were the other main gainers in Abu Dhabi, rising for a second straight day of trading following the announcement of a possible merger with Al Reem Investments. The developer’s shares closed up 6.9 per cent at 93 fils, their highest level for four weeks.
Dubai’s headline was little changed for the day amid thin trading volumes, with gains by Dubai Islamic Bank and Aramex cancelled out by falls by Damac Properties and Emaar Malls.