Dana Gas says sukuk holders approve restructuring to end legal dispute

The company said 93.69 per cent of early voters chose to remain as sukuk holders exceeding the required approval threshold of 75 per cent

Dana Gas said sukuk holders approved an agreement to restructure a $700m sukuk following a protracted legal dispute since last year. Jaime Puebla / The National

Sharjah energy company Dana Gas said the majority of sukukholders have voted in favour of an agreement proposed last month to restructure and refinance the company’s $700 million sukuk, which has been the subject of a protracted legal dispute since last year.

“We are extremely pleased to have received consent from an overwhelming majority of sukuk certificate holders, thus confirming the company’s belief that the proposed terms of the deal was fair and in the best interests of all,” said Patrick Allman-Ward, chief executive of Dana Gas, in a statement on Tuesday.

Dana Gas said in May the ad-hoc committee of sukukholders entered into a binding agreement offering them two refinancing options, with the transaction to complete by the first half of July. Creditors were given until July to consider the terms and conditions of the offer, which allows them to either exit or retain their investment on fresh terms.

An early participation fee deadline of June 1 was given, and Dana Gas said 93.69 per cent of early voters have chosen to remain as sukukholders, exceeding the required approval threshold of 75 per cent.

Dana Gas has been embroiled in a legal battle over the legality of its sukuk since last year, when it surprised creditors including investment bank Goldman Sachs and the world’s largest asset manager BlackRock by declaring its bonds non-Sharia compliant, citing changes in Islamic finance. The company argued it was therefore not obliged to repay the debt, and has faced legal action from creditors as a result.

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Under the agreement last month, sukukholders had the opportunity to immediately cash in their claims at 90.5 US cents per dollar of the face value of their holdings, or receive a partial pay down and exchange the rest into a new sukuk instrument with a deferred payment structure.

Dana Gas said on Tuesday that as of June 1, the company received consent from 90.93 per cent of 9 per cent "ordinary" sukuk certificate holders and 96.45 per cent of 7 per cent exchangeable sukuk certificate holders.

None voted against the proposals. Sukukholders are expected to formally approve the plans at a general meeting on June 13.

“The company will continue to update the market with more details as to the tender offer and [exchange offer] once the notice period expires,” Dana Gas said.