Dana Gas obtains injunction to block claims on $700m sukuk

An initial hearing on the application is scheduled for December 25 this year

Dana Gas, the Middle East’s largest regional independent natural gas company, yesterday said it obtained an injunction from the Sharjah Federal Court of First Instance blocking claims for payments on its $700 million (Dh2.57 billion) of outstanding sukuk.

The company said the court had issued an injunction pending determination of the company’s application to have its sukuk dated May 8, 2013 declared unlawful and unenforceable.

“An initial hearing has been scheduled on December 25 2017,” the company said in a statement posted on Abu Dhabi Stock Exchange’s website. “The injunction restrains... from taking any action, inside or outside the United Arab Emirates, to enforce against any of the securities of the company and its affiliates under the Company’s Security Agreement until a final determination is made by the Court in the lawsuit.”

Reacting to the developments, Sanyalaksna Manibhandu, head of research at NBAD Securities, told Gulf News if the existing sukuk signed in May 2013 is non-Sharia-compliant then it cannot be enforced.

“The company has been advised on this and they want to protect from any litigation arising due to the latest developments,” Manibhandu said.

The company is also in the process of collecting over $900 million of total receivables due from the KRG (Kurdistan Regional Government) and Egyptian government. On June 7, Dana Gas announced the new payment of $40 million towards its outstanding receivables in Egypt taking the total amount received to $135 million with $187 million still pending.