Tuesday, May 15, 2012

--Dana looks for a consensual solution as maturity approaches

--Says advisers were hired to "advise on various options" on the sukuk

--Net Profit more than doubles on higher energy prices, Iraq production gains

(Recasts. Adds company comment on Dana Gas sukuk.)

By Asa Fitch

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Dana Gas PJSC (DANA.AD), the Abu-Dhabi-based oil and gas company, has hired Deutsche Bank, Blackstone Group and law firm Latham & Watkins to advise it on ways to address a $1 billion Islamic bond that matures in October.

The company, which Tuesday reported first-quarter net profit more than doubled on higher hydrocarbon prices and production in Iraq, acknowledged that a challenging economic environment and uncertainty surrounding some of its operations have affected its ability to raise new funding.

But the company said in a statement that it was "committed to finding a consensual solution that is equitable to all stakeholders." Deutsche, Blackstone and Latham & Watkins were hired to "advise on various options for discussions with the sukukholders and their advisors," the statement said.

Despite rising profits, concern has grown recently over Dana's financial position and ability to repay the sukuk, which it sold in 2007.

The sukuk matures on October 31. The company had $143 million of cash and cash equivalents on hand at the end of the first quarter, according to its financial statements.

The company, which has significant operations in Egypt and Iraq's Kurdistan region, has had trouble collecting money from customers in politically unstable parts of the region. Trade receivables stood at AED825 million in Egypt at the end of the quarter. Dana's share of trade receivables from its Kurdistan project were AED1.04 billion at the end of the quarter.

Net profit in the first quarter amounted to 206 million U.A.E. dirhams ($56 million), up from AED92 million in the year earlier period, according to its income statement published on the website of the Abu Dhabi stock exchange.

The quarterly result beat both the AED146 million that analysts at EFG Hermes had predicted and the AED154 million effort that HSBC had penciled in.

Dana Gas shares closed Tuesday 2.6% higher at AED0.40.

-By Asa Fitch and Tim Falconer, Dow Jones Newswires; +9714 446-1690; tim.falconer@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

15-05-12 1048GMT