Dana Gas dismisses $700m sukuk proposal

Dana Gas dismissed a new proposal from bondholders for the restructuring of US$700 million worth of sukuk, in the latest twist of an acrimonious dispute closely watched by Islamic finance practitioners.

The proposal has the support of more than 70 per cent of sukuk holders and includes a cash paydown of $300m. It has a maturity extension of three years, and the dual listing of the energy firm’s shares – already listed on the Abu Dhabi stock exchange – in London, to facilitate greater access to capital markets.

“We have always wished to negotiate a consensual restructuring of the sukuk, in response to the company’s request for an extension,” said Andrew Wilkinson, of the lawyers Weil, Gotshal & Manges, representing the ad hoc committee of sukuk holders, which includes Goldman Sachs and BlackRock.

“We hope that Dana’s management sees this as a good proposal which would deliver a stable capital structure going forward enabling value creation for all stakeholders.”

However, a source close to Dana Gas said the company has already dismissed the offer as “unacceptable and unrealistic”, saying it “doesn’t believe that the proposal accurately reflects the legal position of bondholders”.

The company will continue to pursue a litigation strategy in London’s courts and Sharjah to restructure its debts, the person said.

Last month Dana Gas announced the settlement of a dispute with the Kurdistan Regional Government, sending its shares soaring.