|15 February, 2018

Dana Gas $700mln sukuk holders say they expect full repayment after court ruling

The committee issued its statement after a London High Court judge again ruled in favour of the creditors on February 1

UAE's Dana Gas building in Cairo.

UAE's Dana Gas building in Cairo.

REUTERS/Mohamed Abd El Ghany

DUBAI - Holders of $700 million of Islamic bonds issued by United Arab Emirates-based Dana Gas DANA.AD expect to recover all the money owed to them under the bonds' original documentation, a committee representing the holders said on Thursday.

The committee issued its statement after a London High Court judge again ruled in favour of holders on Feb. 1, rejecting an attempt by Dana to overturn his decision last November that the purchase undertaking behind the sukuk was valid and enforceable.

Dana shocked the global Islamic finance industry last June by refusing to redeem its sukuk on the grounds that they were no longer sharia-compliant and therefore unlawful in the UAE. That has led to a protracted legal battle in British and UAE courts.


The sukuk holders said on Thursday that in addition to his decision to uphold the purchase undertaking, the London High Court judge had issued an injunction requiring Dana to withdraw its legal proceedings and injunctions in the UAE.

The court also directed that an injunction preventing sukuk holders from enforcing claims against Dana under the purchase undertaking would expire on March 29, and ordered the company to pay sukuk holders' legal costs, the statement said.

As a result, "We now look forward to payment in full of the amounts owed to the certificate holders as per the Purchase Undertaking, and drawing these legal proceedings to a close," the statement said.

Dana did not immediately respond to an emailed request for comment.

The sukuk holders' statement came after several weeks of talks between the company and at least some of its creditors failed to reach an out-of-court settlement.

About two weeks ago, Dana submitted a new proposal to restructure the sukuk to creditors, who rejected it because they felt the terms were unfavourable, sources familiar with the matter told Reuters this week. 

The company had offered to redeem 10 percent of the sukuk in cash and to roll over the remaining 90 percent over four years at an annual profit rate of 4 percent. It also offered to buy back up to half of the bonds at a 15 percent discount.

(Reporting by Andrew Torchia and Davide Barbuscia Editing by David Holmes) ((; +9715 6681 7277; Reuters Messaging: