Published: December 12, 2012
The favourable terms of the deal have led to a stock market bounce.
UAE-based Dana Gas has agreed the restructuring of its US$920mn convertible sukuk. The company announced last month that it had missed its October repayment, largely the result of delayed supply payments from Kurdistan and Egypt.
The new arrangement will see creditors receive US$70mn in cash. The US$850mn balance will be split into 5-year convertible bonds with a return of 7%, and a conventional sukuk with a 9% return. Dana’s share price shot up 10% on the deal’s announcement.
In October Dana Gas became the first UAE-based company to default on an Islamic bond. Political unrest in Egypt and disagreement between the Kurdish government and Baghdad led to delayed supply payments and consternation on the part of creditors. The company suffered a 27% drop in Q3 profits to US$29mn as a result of these troubles.