DUBAI / Reuters
Abu Dhabi’s Dana Gas said it would propose restructuring $700 million of outstanding Islamic bonds on Tuesday to a committee of holders of the sukuk, which it said was not sharia-compliant.
“The company has recently received legal advice that the sukuk in its present form is not sharia-compliant and is therefore unlawful under United Arab Emirates law,†it said.
Dana said it would propose exchanging the existing sukuk with new sharia-compliant instruments with four-year maturities and the new instruments would offer the right to profit distributions at less than half the rate of the existing instruments, and would not feature any conversion into equity.
The company, which has been facing a cash shortage because of missed payments from its production assets in Egypt and Iraq’s Kurdistan, announced its intention to hold discussions with sukuk holders in early May.