Dana creditors reject new sukuk revamp plan
Latest restructuring proposal was submitted to sukuk holders about two weeks ago
Creditors of Dana Gas have rejected a new proposal by the company to restructure its $700 million (Dh2.57 billion) of Islamic bonds and are waiting for improved terms, two sources familiar with the matter said yesterday. 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 UAE 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 per cent of the sukuk in cash and to roll over the remaining 90 per cent over four years at an annual profit rate of 4 per cent, said the sources. It also offered to buy back up to half of the bonds at a 15 per cent discount.
The creditors’ committee, advised by investment bank Moelis, rejected Dana’s proposal. Creditors would be ready to accept an offer to exchange the sukuk for new instruments but on more favourable terms, the sources said.
They would want Dana buy back the bonds at par. to