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Thu 1 Nov 2012 10:08 AM

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Dana Gas says missed $1bn sukuk deadline

Sharjah-based natural gas firm fails to pay outstanding US$920m on Islamic bond

Dana Gas says missed $1bn sukuk deadline

Dana Gas, the Sharjah-based natural gas firm, failed to pay the outstanding US$920m on an Islamic convertible bond that matured on Wednesday, becoming the first United Arab Emirates company to fail to repay a bond.

The UAE's largest listed natural gas firm, hit by payment delays from Egypt and Iraq's Kurdistan region, said it had also missed a US$18.75m accrued profit payment due on October 30.

"Dana Gas is in ongoing discussions with an ad-hoc committee of sukuk holders over terms to amend and extend the sukuk," it said in a bourse statement.

Dana had a US$1bn sukuk maturing on October 31. It repurchased about US$80m of the sukuk in 2008, leaving US$920m outstanding.

The five-year sukuk, which was issued with a 7.5 percent coupon, has gained international interest as a majority of the debt is said to be owned by large investment firms including BlackRock Inc and Ashmore Group.

Dana said liquidity challenges, mainly due to non-payments from Egypt and Kurdistan, are "short-term" and it is committed to finding a consensual solution with the bondholders.

In May, Dana said it had hired Blackstone Group, Deutsche Bank and law firm Latham & Watkins as advisers.

Investors have hired Moelis and law firm Linklaters as advisers.

Dana's shares and bond has been under pressure on investor worries of non-payment of the outstanding bond. On Tuesday, Reuters reported that the company was set to miss the payment of the sukuk.

In a separate statement, Dana said its third-quarter net profit fell 27 percent to AED104m (US$28.31m) from AED143m a year-ago. Its cash balances as at September 30 stood at AED516m.

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Desert sand 7 years ago

Many private companies go for IPO, the reason behind is collect the money from public, and they have no responsibility to return your money back! , and it is legal. The Danagas did not pay any cash dividend during past seven years, and today they will not be able pay the bond debt also! And what is your choice to buy danagas share or to buy shoes?, the share price is cheaper than than the shoes right now! At 41 files, it was at 5 aed each in 2005!