Dana Gas hires advisers for $920m convertible sukuk

Energy group Dana Gas said it has appointed an international firm to advise on its $920 million (Dh3.38 billion) convertible sukuk maturing in October, adding it would continue to meet its obligations. Dana Gas, whose share price has been battered by concerns about how it will deal with the sukuk, said yesterday it would update the market with its plans in due course. The company said it may also list its sukuk in London to gain a wider investor base and boost its stock value. "The sukuk is a particular focus area for us and the board has been considering a London listing to lift the company's share price which has been hurt by political unrest in the Middle East and North Africa," said CEO Ahmad Al Arbeed said. "The company is in the process of having an adviser in place for a liability management programme to have the most effective way of handling its sukuk. "We look forward to update the market further when we announce our preliminary financial results on January 31," he said. According to Waddah Taha, a financial and market analyst at Zarouni Group, the company is qualified to issue bonds. Its total assets in the third quarter stood at Dh11.87 billion, out of these Dh9.65 billion are non-current or long-term assets, he said. Long-term assets "The long-term assets are 81.4 per cent and the debt ratio based on total liabilities, which is estimated at Dh3.9 billion, is 32.8 per cent, which is very low and controllable," he said. "By adding the Dh3.67 billion of bonds to the Dh3.9 billion, the total liabilities will rise to Dh15.54 billion, leading to an increase in its debt ratio to 49 per cent which is also controllable and not risky." The company's statement yesterday came almost two weeks after a January 4 board meeting which included financing options on its agenda, following which the company only issued a brief note saying the board had met. "Investors were expecting to hear [after the meeting] how Dana will deal with its 2012 maturity, but nothing came out of the meeting and that uncertainty has seen the sudden and pronounced drop in the bond," said Thomas Christie, fixed income trader at Rasmala Investment Bank. Dana Gas has a three per cent stake in Hungarian group MOL, worth around 55.2 billion forints ($225 million). Potential sales of businesses in Egypt and Kurdistan are also fraught with political risk, which would hit the price. Dana Gas's chief executive told Reuters in September the company was owed around $200 million by Egypt. It said yesterday it was continuing to have "constructive discussions" with the government over delayed payments from state-owned entities in the country. Dana, which saw its thirdquarter profit more than quadruple, was expected to post a Dh151 million profit for the fourth quarter, an increase of 156 per cent, according to Global Investment House.