Dana Sukuk Yield Soars on Repayment Concern: Abu Dhabi Mover
January 30, 2012, 7:38 AM ESTBy Dana El Baltaji
Jan. 30 (Bloomberg) -- The yield on Dana Gas PJSC’s $1 billion Islamic bonds jumped to the highest level in two weeks as the United Arab Emirates energy company reported full-year results without providing an update on the sukuk repayment.
The rate on the 7.5 percent sukuk due in October climbed 79 basis points, or 0.79 of a percentage point, to 64.69 percent at 2:17 p.m. in Dubai, according to data compiled by Bloomberg, the highest since Jan. 16. The price dropped to 68.17 cents on the dollar.
“No one cares about the past,” Akos Kuti, Budapest-based head of research at Equilor Befektetesi Zrt., said in a telephone interview today. “Investors are focusing on the future and whether the company will have enough financial resources to cover the $1 billion payment. The figures for 2011 are not enough.”
The company said Jan. 17 it would meet debt obligations and has appointed a financial adviser. Dana Gas may restructure the debt, Bank of America Corp. said in a report on Jan. 24, cutting the shares to “underperform.” The producer of oil and gas mostly from Egypt and Iraq said today net income advanced to 506 million dirhams ($138 million) from 158 million dirhams a year earlier. The average estimate of seven analysts was for a profit of 524 million dirhams, according to data compiled by Bloomberg.
Dana Gas shares rose 2.7 percent to 38 fils at the 2 p.m. close in Dubai, trimming their 12-month decline to 41 percent.
The company “continues to balance operating and necessary capital expenditure within the available finance resources,” Dana Gas said today, without providing further information on the sukuk. It had cash and bank balances of 411 million dirhams at the end of last year compared with 583 million a year earlier, it said.
“This announcement is not enough,” Kuti said. “Investors want to see details, they want to see how Dana Gas can survive in the current financial situation.”
--Editors: Susan Lerner, Claudia Maedler
To contact the reporter on this story: Dana El Baltaji in Dubai at delbaltaji@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
