Abu Dhabi – Mubasher: Dana Gas on Wednesday said it will begin discussions to restructure its sukuk schemes.
The company will hold talks with its sukuk holders dated 8 May 2013, the Middle East’s largest regional independent natural gas company said in a filing to the Abu Dhabi Securities Exchange (ADX).
The restructure plans are due to the continued challenges Dana Gas is facing regarding its cash collections and the resulting need to focus on short-to-medium-term cash preservation.
“The company will be addressing the way forward on the sukuk, which has a maturity date of 31 October 2017, in a practical manner that balances the interests of all stakeholders. The remaining profit payments will be addressed sensibly as part of the solution,” Dana highlighted in its statement.
With increased production in Egypt and steady operations in the Kurdistan Region of Iraq (KRI), Dana believes 2016 was “another successful year”.
It also made “excellent progress in its ongoing arbitration cases against the Kurdistan Regional Government (KRG) and National Iranian Oil Company (NIOC), the awards of which fully affirmed the company’s disputed contractual rights, as well as receivables owed by the KRG,” according to the statement.
However, owing to the difficult macroeconomic backdrop in Dana’s two key markets, it has continued to endure challenges concerning its cash collections.
By the end of 2016, Dana’s “collections in Egypt amounted to $79 million, representing a realisation rate of 64%, of which only $3.5 million were collected in US dollars with the balance received in Egyptian pounds.”
Meanwhile, the UAE company’s outstanding receivables as of 31 December 2016 stand at $265 million, it said, stressing that following the currency flotation in Egypt, “collections may, therefore, remain below expectations in the near term.”
Meanwhile, collections from the KRI improved in 2016 “with local sales of liquid petroleum products and staged payments by the KRG for outstanding debt realising $101 million for Dana Gas”, resulting in $713 million in “undisputed amount” owed to Dana as of 31 December 2016.
