Dana Gas creditors expect full repayment

The committee issued its statement after a London High Court judge again ruled in favour of holders

Holders of $700 million (Dh2.6 billion) of Islamic bonds issued by UAE-based Dana Gas expect to recover all the money owed to them under the bonds’ original documentation, a committee representing the holders said yesterday.

The committee issued its statement after a London High Court judge again ruled in favour of holders on February 1, rejecting an attempt by Dana to overturn his decision last November that the purchase undertaking behind the sukuk was valid and enforceable.

Last June, Dana refused to redeem its sukuk on the grounds that they were no longer Sharia-compliant and therefore unlawful in the UAE. That has led to a protracted legal battle in British and UAE courts. The sukuk holders said yesterday that in addition to his decision to uphold the purchase undertaking, the London High Court judge had issued an injunction requiring Dana to withdraw its legal proceedings and injunctions in the UAE.

The court also directed that an injunction preventing sukuk holders from enforcing claims against Dana under the purchase undertaking would expire on March 29, and ordered the firm to pay sukuk holders’ legal costs, the statement said. As a result, “We now look forward to payment in full of the amounts owed to the certificate holders as per the Purchase Undertaking, and drawing these legal proceedings to a close,” it added.

A company spokesperson said Dana Gas found the statement “misleading” and that it regrets the committee’s “continuing aggressive stance”.

“Ultimately, whether any payment has to be made under the Purchase Undertaking depends on the determination of the UAE law issues” and the application of the Mudarabah agreement — the Islamic finance structure which regulates Dana’s sukuk — which is governed by UAE law, and these matters are still under litigation, the spokesperson said.