UAE energy group Dana Gas said that it had appointed an international firm to advise on its USD 920 million 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 that it would update the market with its plans in due course.
Mr Ahmed Al Arbeed CEO of Dana Gas said that "We look forward to updating the market further when we announce our preliminary financial results on January 31st 2012."
Mr Chavan Bhogaita, head of the markets strategy unit at National Bank of Abu Dhabi, said that "While today's statement from the company is certainly a welcome change to the radio silence that prevailed recently, holders of the sukuk are unlikely to take much reassurance from it."
He added that "Frankly, what investors want is greater clarity at the granular level of how the company is going to raise sufficient funds to repay or refinance this sukuk in October."
Its statement came almost two weeks after a January 4th 2012 board meeting which included financing options on its agenda, following which the company only issued a brief note saying the board had met.
Mr Thomas Christie, fixed income trader at Rasmala Investment Bank, said that "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."
Analyst calls, only started by Dana Gas for the third quarter of 2010, stopped after it reported first quarter numbers last year. Its head of investor relations, left on December 8th 2011, a note from distressed debt trader Exotix, published January 8th 2012.
Dana, the Gulf's only listed natural gas firm, had AED 418 million cash, according to its third quarter results, while investment firm Exotix said it has USD 260 million of potential internal liquidity available. A second banker said Dana was eyeing a number of options for its USD 920 million sukuk.
In 2011, Dana proposed listing some of its assets on the London Stock Exchange and sources close to the matter said the company was still looking to do so this year; although, if market conditions are unfavorable, they wouldn't proceed. More important though for the success of the initial public offering is a resolution to the sukuk uncertainty.
(Sourced from www.emirates247.com)
