Dana Gas gets regulator approval to buy back 10% of shares

Energy producer to buy back 697.7 million shares

If a sale of Dana Gas Egyptian assets were to go ahead, the proceeds of the sale would be used to pay down its sukuk. Jaime Puebla / The National

Dana Gas obtained approval from the UAE market regulator to buy back up to 10 per cent of its shares, a move that is in line with the company shareholders' decision last month.

The Securities and Commodities Authority (SCA) permitted the company to purchase up to 10 per cent of its stock, which amounts to  697.7 million shares, Dana Gas said on Thursday in a statement to the Abu Dhabi stock exchange where its shares are traded.

"The company was granted approval by the Securities and Commodities Authority on 20 May 2019 to buyback up to 10 per cent of its shares," Dana Gas said in the filing.

In March, the board of Dana Gas said it would propose a plan to shareholders for a 10 per cent shares buyback, spurred by the belief that its stock is undervalued on the Abu Dhabi exchange and the programme would help boost its market capitalisation. During a company annual general meeting on April 17, Dana Gas shareholders approved the plan.

The Sharjah-based energy producer is also seeking to list its shares in alternative bourses. Earlier this month, Dana Gas said it is screening advisers to help it list shares in London as it revives plans to attract a broader range of international investors to boost the value of its stocks.

While the London Stock Exchange is the "most likely" option, it has not yet been confirmed, according to Patrick Allman-Ward, chief executive of Dana Gas.

Stock markets in the UAE have seen a drop in trade volumes amid a global economic slowdown and volatility during a three year-oil price slump that began in 2014.

The company reported a 150 per cent rise in first-quarter net income of $35 million (Dh128.5m), as lower financing costs and higher income from other sources boosted profitability. First quarter revenue fell by 1 per cent to Dh436m.