Abu Dhabi Fund Buys Dana Stake Amid $700 Million ‘Unlawful’ Debt

Abu Dhabi’s Goldilocks Investment Co. bought 5 percent of Dana Gas as the energy producer stunned investors saying its $700 million sukuk is “unlawful and unenforceable.”

The fund, controlled by investor Jassim Alseddiqi’s Abu Dhabi Financial Group, acquired 350 million shares of Dana Gas, Goldilocks said in a statement Monday. It didn’t disclose more financial information. Dana Gas shares have surged 66 percent in June.

Alseddiqi’s firm, with assets under management of $5 billion, has a history of buying stakes in listed companies. In the past years, it acquired holdings in Bahrain-based GFH Financial Group, Dubai-based Gulf Navigation Holding PJSC and the brokerage arm of Abu Dhabi-based First Gulf Bank PJSC. Alseddiqi become chairman of Shuaa Capital PSC after Abu Dhabi Financial Group bought a stake in the Dubai-based investment bank.

Abu Dhabi Financial Group started the $200 million Goldilocks fund last year, saying it targets “undervalued opportunities” in the six-member Gulf Cooperation Council countries.

Dana Gas said last week it no longer considered its sukuk Shariah-compliant under United Arab Emirates law. Since then the company has obtained injections from courts in Sharjah, London and the British Virgin Islands, refraining sukuk holders from taking any action against the bonds.

The gas producer has scheduled a conference call with sukuk holders on June 21 to “provide proper context and additional information regarding planned restructuring.”

— With assistance by Filipe Pacheco

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