Dana Gas seeks sukuk restructuring

SHARJAH, May 3, 2017 – UAE-based Dana Gas said on Wednesday that it would seek to restructure bonds due October 31.

In a press release, the company said the decision was guided by ongoing difficulties with the collection of outstanding receivables.

Though Dana Gas did not specify the exact amount in its press release, Bloomberg cited company data to report that the outstanding value of the sukuk, or Islamic bond, at USD 700 million.

“Whilst the Company must focus on near to medium term cash preservation, the future outlook is far more positive,” its statement said, noting that the company is struggling to recover more than USD 1 billion in outstanding receivables from the Kurdistan Regional Government, Egypt and Iran.

Dana Gas therefore cautioned that it needed “time to realize its full value for the benefit of all of its stakeholders.”

“[T]he Company’s potential value – prepared by an independent consultant for the Board – was estimated to be in excess of USD 29 billion on the basis of the maximum potential value of the Company’s main assets, including its key resources and reserves in the KRI, Egypt and the UAE, arbitration awards and pending damages claims,” the release also said.

This is the second time since 2012 that the company is forced to restructure debt. Some five years ago, investors agreed to extend the maturity of a USD 1-billion of bond.

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