By: Mahmoud Gamal
Abu Dhabi – Mubasher: Dana Gas has become a focus after it announced that its $700 million sukuk in its present form is not Sharia-compliant and unlawful under the UAE Law.
The company said it will hold a phone conference with sukuk holders to clarify the reason for the sukuk’s unlawfulness.
Dana does not have a lot of solutions to face its liquidity crisis, especially after it did not receive dues from Egypt and the Iraqi Kurdistan Region, analysts said.
The company is currently seeking to resolve its problems with sukukholders, analysts said, adding that prolonging negotiations may push creditors to raise their ceiling of demands locally and internationally.
Resorting to take judicial proceedings to prevent sukuk holders from asking for their rights confirms that Dana cannot find a way out from the current issue, according to Wadah Al-Taha, member of the National Advisory Board of Chartered Institute for Securities & Investments (CISI).
The ad-hoc committee representing sukuk holders rejected the company’s proposal to exchange the sukuk due in October with a new enforceable, Sharia-compliant instrument, which would have a tenor of four years.
Dana was granted court injunctions that restrain any enforcement action against its interests.
The company was granted on 13 June an additional injunction from the commercial division of the High Court of Justice in the British Virgin Islands (BVI).
Sharjah Federal Court of First Instance issued an injunction pending determination of the company’s application to have its sukuk dated 8 May 2013 deemed unlawful.
Late payments from the Iraqi Kurdistan Region, Egypt, and Iran created an accumulated crisis for the company that cannot be resolved except through negotiations with the sukuk holders.
Translated by: Julian Nabil
