Dana Gas Restructures $1bn Bond to Avert Asset Seizure

By John Lee.

Dana Gas, the Middle East’s first and largest regional private sector natural gas company, has announced that it has reached an in-principle agreement on the restructuring terms of the US$1 billion Sukuk-al-Mudarabah due 31 October 2012 with the Ad Hoc Committee of Sukukholders. The Ad Hoc Committee holds a majority of the outstanding Sukuk.

The Agreement envisages that $80mn of the Sukuk currently held by the Company will be cancelled and that Sukukholders will receive a partial paydown from the Company’s balance sheet cash. The remaining Sukuk will be reinstated as two pari passu instruments comprising a New Ordinary Sukuk and a New Convertible Sukuk which will have revised economic terms.

Dr. Adel Khalid Al-Sabeeh (pictured), Chairman of the Board of Dana Gas said:

"We are very pleased to have reached an agreement, which we believe best preserves the interests of all stakeholders. We now have a clear way forward that will allow the management of Dana Gas to concentrate on building value from our very promising interests in Egypt and the Kurdistan region of Iraq. We look forward to a very promising future as MENA's leading independent gas producer."

Dana Gas confirms that the profit payment due on 30 October 2012 has been paid. The Company also confirms that it has entered into a standstill agreement with the Ad Hoc Committee. In the meantime, the parties are working in good faith to agree a lock-up agreement.

Detailed terms of the restructuring and implementation details will be announced by the Company upon signing of the lock-up agreement and will be subject to approval by the relevant regulatory authorities, Company’s shareholders, and Sukukholders at meetings to be convened in due course. All of these steps and procedures are customary in transactions of this nature.

The Company is being advised by the Blackstone Group International Partners LLP, Deutsche Bank and Latham & Watkins LLP. The Ad Hoc Committee is being advised by Moelis and Company UK LLP and Linklaters LLP.

(Sources: Dana Gas, Bloomberg)

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