Dana Gas completes sukuk restructuring

Dubai-based independent gas company Dana Gas has completed the restructuring of its controversial $700 million sukuk.

The restructuring was necessary after Dana Gas withheld the payment of dividends on grounds that the instrument had ceased to be sharia-compliant. The decision raised international investors’ concerns about the enforcement of creditors’ rights and the lack of standard definitions around Islamic securities.

The dispute gave rise to a legal stand-off in the UK and UAE courts between the company and its creditors.

Dana Gas has paid $235 million on redemptions, profit payments and early participation fees and the size of the new sukuk is reduced from $700 million to $530 million. It is listed on Euronext Dublin and is set to mature in October 2020 with a new profit rate of 4% per annum.

The restructured sukuk “represents a fair and consensual deal” for shareholders and “a ringing endorsement that the overwhelming majority of sukuk holders remain invested with the company”, said Patrick Allman-Ward, Dana Gas chief executive.

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