Bloomberg News

Dana $1 Billion Sukuk Yield Jumps to Record, Shares Drop

May 09, 2012

The yield on Dana Gas PJSC (DANA)’s Islamic bonds due in October jumped to a record after investors were said to have hired law firm Linklaters LLP to help negotiate the restructuring of the $1 billion Islamic bonds.

The yield on the 7.5 percent notes soared to 85.2 percent at 4:31 p.m. in Dubai, prices compiled by Bloomberg show. The Sharjah, United Arab Emirates-based company’s shares dropped 2.3 percent to 42 fils, the lowest in three months, at the 2 p.m. close in Abu Dhabi. The benchmark ADX General Index (ADSMI) retreated 0.2 percent.

The London-based law firm was hired last month, said three people familiar with the matter yesterday, declining to be identified because the information is private. The company hired Blackstone Group LP (BX:US) to advise on restructuring the Islamic bonds, three people familiar with the matter said in April. Deutsche Bank AG is also advising the gas explorer, two people with knowledge of the matter said in January. Dana Gas said that month it would continue to meet its debt obligations. The company and Linklaters declined to comment yesterday.

“Although the company announced in the beginning of the year that it will meet its obligations, the recent appointment of Blackstone as a financial adviser and the news of appointing Linklaters as legal adviser is guiding us to an imminent restructuring,” said Tariq Qaqish, deputy head of asset management at Dubai-based Al Mal Capital. “It seems like not all creditors are agreeing.”

Dana Gas, whose chief executive officer plans to retire this year, produces and explores for oil and gas in Egypt and Iraq’s Kurdish region.

To contact the reporters on this story: Alaa Shahine in Dubai at asalha@bloomberg.net; Dana El Baltaji in Dubai at delbaltaji@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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