Islamic Finance

Dana Gas creditors reject new proposal to restructure $700 mln sukuk

| 13 February, 2018
Dana Gas creditors reject new proposal to restructure $700 mln sukuk
Photo: A view shows UAE's Dana Gas building in Cairo November 2, 2012. REUTERS/Mohamed Abd El Ghany

13/02/2018 14:30 | DUBAI

Creditors of United Arab Emirates energy producer Dana Gas have rejected a new proposal by the company to restructure its $700 million of Islamic bonds and are waiting for improved terms, two sources familiar with the matter said on Tuesday.

Dana refused to redeem its sukuk when they matured last year on the grounds that the instruments were no longer sharia-compliant because of changes in Islamic finance practice.

While legal proceedings between the company and its creditors are continuing in British and United Arab Emirates courts, talks to find an out-of-court settlement have so far produced no concrete result.

The latest restructuring proposal was submitted by the company to sukuk holders about two weeks ago, said one of the sources, declining to be named because of commercial sensitivities.

Dana and a committee representing creditors did not immediately respond to requests for comment.

The company offered to redeem 10 percent of the sukuk in cash and to roll over the remaining 90 percent over four years at an annual profit rate of 4 percent, said the sources. It also offered to buy back up to half of the bonds at a 15 percent discount.

(Reporting by Davide Barbuscia; Editing by Andrew Torchia)

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