Dana Gas Names Advisers for $700 Million of Islamic Debt

  • ‘Restructuring may be easier than others’: Arqaam analyst
  • Dana Gas has $700 million in Islamic bonds due in October

Dana Gas PJSC named legal and financial advisers to assess options for about $700 million in Islamic bonds due in October, according to a person with knowledge of the situation.

Houlihan Lokey Inc. will serve as financial adviser and Squire Patton Boggs LLP will provide legal counsel, according to the person, who asked not be identified because the matter is not public. None of the companies commented.

Dana Gas, which produces most of its energy in Egypt and Iraq, announced plans to restructure the debt in May, saying it needed to “focus on short to medium-term cash preservation.” The United Arab Emirates-based energy producer is owed about $1 billion from Egypt and the self-governed Kurdish region in northern Iraq. Dana Gas had about $298 million of cash on hand at the end of March.

“This restructuring may be easier than others because it’s clear what the issues are -- it’s the payments and receivables that the company is still trying to collect,” said Abdul Kadir Hussain, head of fixed income asset management at Arqaam Capital Ltd. in Dubai. “It’s a liquidity issue, not an issue of solvency or business structure.”

Dana Gas said last month it would ask bondholders to accept changed terms on the debt, marking its second restructuring in five years. The company needs time “to realize its full value,” Dana Gas said at the time. The company previously restructured a $1 billion sukuk that was due at the end of October 2012.

Moelis & Co. is set to advise holders of the Islamic bonds, two people with knowledge of the matter said last month.

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