Last call on Dana Gas restructuring

Equity investors of Dana Gas will attend an extraordinary shareholders meeting tomorrow, amid plans to vote on the restructuring of its $920 million sukuk.

Dana Gas lost 18 per cent from the value of its shares from last October to mid-November after the company was unable to repay the principal of its Islamic bond. Tamara Abdul Hadi / Reuters

Dana Gas shareholders will be hoping it is a case of third time lucky tomorrow when they decide whether to approve the restructuring of a US$920 million (Dh3.37 billion) sukuk.

The Sharjah-based gas producer missed a payment in October.

Tomorrow's meeting will be the last call. Dana was unsuccessful at two earlier occasions in achieving the required quorum.

The meeting comes two days after the company was awarded a new concession in Egypt. Dana has a 100 per cent interest in the concession, it said in a statement yesterday. The block is in North El Arish, an offshore location in the Nile Delta.

"We believe that both shareholders and sukuk-holders will give their approval to the restructuring as we think that the terms are favourable for both of them," said Quantum Investment Bank, based in Dubai, in a note to clients yesterday.

Dana, along with Dubai's Drydocks and Dubai Group, are among several UAE businesses that are renegotiating payment terms for corporate debt.

"Dana has protected its shareholders' interests by choosing the restructuring option and not selling any of the company's major assets in order to repay the sukuk," the analysts Montasser Khelifi and Naseem Abdo Othman wrote in the note.

Dana lost 18 per cent from the value of its shares from last October to mid-November, reaching a low of 39 fils each, after the company was unable to repay the principal of its Islamic bond amid payment delays from its main countries of operation.

"The restructuring will allow the company to have a 'breather' for five more years and we believe in its ability to meet the restructuring repayment schedule relying only on its own resources," the analysts said.

Dana has faced ongoing payment delays related to its operations in Iraq, amid disputes between the Kurdish Regional Government and the central government in Baghdad. The company began experiencing a delay in payment in Egypt after the popular uprising toppled the then president Hosni Mubarak, who ruled the country for more than three decades.

This month, Dana confirmed it had received $73.7m from Egypt and Iraq since the start of the year.