Sukuk are an important pillar of the initiative positioning Dubai as the global capital of the Islamic economy Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai

dubai — Energy producer Dana Gas reached agreement with creditors on restructuring $700 million of sukuk, the firm said on Sunday, potentially ending a protracted legal battle that unsettled the global Islamic finance industry.

The UAE firm said in June it would not redeem the Islamic bonds, arguing that changes in Islamic financial practice since they were issued made them invalid under UAE law. This led to months of negotiations and a fight in UAE and British courts.

Under the deal with the sukuk holders’ committee, investors who want to exit the instruments

The consensual transaction represents a means to resolve amicably all current issues and disputes facing the parties Dana statement

will be able to do so at 90.5 cents on the dollar, which includes a bonus of 2.5 cents if they accept within seven days of the start of the tender offer. Alternatively, investors will be able to exchange the sukuk into new three-year Islamic instruments with a 4 per cent profit rate, while receiving final profit payments that they were owed before the old sukuk matured last October 31.

“The consensual transaction represents a means to resolve amicably all current issues and disputes facing the parties,” Dana said in a statement.

The company said it expected to launch the tender offer this month and complete the deal by the first half of July. Its shares jumped 4.8 per cent in early trade on Sunday in response to news of the deal, which it said could cut its debt by up to $385 million. — Reuters