Dana Gas to close ‘overdue’ Sukuk using Mashreq’s $90 mn facility

$309 mn remains to be redeemed; Loan priced at 3 pc over Libor

SHARJAH/October 15: Dana Gas, the Middle East’s leading regional private sector natural gas company, is all set to redeem on October 31, the remaining $309 million in the controversial Sukuk by using the $90 million corporate facility availed from Mashreq Bank

The one-year facility from Mashreq Bank is priced at an initial 3 per cent per annum margin over Libor. During the period ended June 30, 2020, the company had bought back Sukuk amounting to $17.8 million (AED55 million).

Subsequent to the first half ending June 30, Dana Gas Group further bought back Sukuk amounting to $70.7 million (AED259 million) bringing the outstanding Sukuk to $309 million (AED1,133 million).

The Sukuk that was originally agreed to be redeemed by October 2017 faced several roadblocks including several restructuring exercises, questions raised about the Shariah rules that govern the Sukuks and the daunting fund crisis faced by the company.

The stand-off between the company and the Sukuk investors had ultimately dragged the dispute between company and the Sukuk investors dawn into the courts in the UAE as well as London.

Mashreq credit facility can be extended

As per the terms of the loan, the credit facility can be extended for a further four years at the company’s option. The credit facility follows Dana Gas’s announcement in the second quarter that it was exploring financial options to settle its Sukuk by the due date.

A statement from Dana Gas has said that in conjunction with the company’s cash reserves, the facility will allow full redemption of the Sukuk at the maturity date of October 31, 2020.

Repayment from sale of Egyptian assets

The outstanding total for the Sukuk is currently $309 million. The Mashreq facility will be repaid when the planned sale of Dana Gas’s Egyptian assets is completed.

Dr Patrick Allman-Ward, Chief Executive Officer of Dana Gas, said that Dana Gas’s robust financial position will allow the facility to be fully repaid when the sale of its Egyptian assets is completed.

“We are delighted to have formed a new, strong partnership with Mashreq and look forward to developing the relationship further,” Allman-Ward said.

Ahmed Abdelaal, Group CEO of Mashreq Bank said his bank aims to offer innovative financing solutions to its partners and clients, and the bank is delighted to extend this credit facility to Dana Gas, which is the Middle East’s largest regional private sector natural gas company.

 

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