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Crescent refuses to provide cash for Dana Gas debt repayment
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Thursday, 17 May 2012

Gulf News reported that Crescent Petroleum has no plan to provide cash to the natural gas producer to help pay USD 1 billion Islamic bond due in October. Any speculation around Crescent injecting further capital to support the Dana Gas sukuk is incorrect.

Mr Majid Jafar Sharjah based CEO of Crescent said that Dana Gas is facing external macro economic and political events outside its control in Iraq's Kurdistan region and in Egypt which have led to unpaid bills, and these are the economic realities that all the stakeholders need to take into account.

According to data compiled by Bloomberg, concern that Dana Gas will default drove up yields on the 7.5% notes by 24 percentage points this month to 91.8% shortly before noon. The company will be unable to repay the sukuk and there is high probability the liability will be reorganized.

Dana Gas, in which Crescent Petroleum holds 20.1% stake, said that in March customers owed USD 501 million to the company at the end of December up from USD 255 million in 2010. Still, its profit advanced to USD 138 million in 2011 from USD 43 million the previous year helped by higher gas production and prices.

The company produces most of its gas in Egypt and Kurdistan and political upheaval in these regions have held up payments. Investors in Dana's sukuk hired Linklaters LLP to help negotiate debt reorganization, three people familiar with the matter said on May 8th 2012.

Source - Gulf News


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