Thursday, Feb 02, 2012
0812 GMT [Zawya Dow Jones]--Investment bank Exotix says there is a high probability that Dana Gas' $920 million sukuk due October 2012 will be restructured. Reckons Dana will have less than 30% of the amount of cash needed when the $920 million sukuk comes due, or $260 million of potential internal liquidity available. Says this implies a significant funding gap of $660 million and also assumes that management decides to sell its public stake in MOL Hungarian Oil and Gas. "We think it will prove very difficult for Dana to secure adequate equity or debt capital to plug this daunting liquidity gap." Says in regards to debt financing, regional bank lending in the company's target markets remains much stressed. Reckons this will reduce banks' willingness to lend to distressed borrowers such as Dana, which, it believes, has little to no government support. "We think management could also propose a tender offer to sukukholders that could involve a repayment in shares, cash, or a combination of both." (nikhil.lohade@dowjones.com)
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(END) Dow Jones Newswires
02-02-12 0812GMT
