UAE based natural gas firm Dana Gas will not repay USD 920 million convertible Islamic bond when it matures and has reached a standstill agreement with bondholders.

Sharjah based Dana hit by payment delays from Egypt and Iraq's Kurdistan region had USD 1 billion sukuk maturing on October 31st 2012. It repurchased about USD 80 million of the sukuk in 2008 leaving USD 920 million outstanding.

The five year sukuk, which was issued with 7.5% coupon has gained international interest as a large chunk of the debt is owned by large investment firms including BlackRock Inc, Ashmore Group and Spinnaker Capital.

There is absolutely no chance of a white knight swooping in to repay the bond by the due date. In 2009, the Abu Dhabi government stepped in at the eleventh hour to help Dubai repay developer Nakheel's USD 4.1 billion Islamic bond.

The sources said that Dana in which Crescent Petroleum owns 20% stake reached a standstill with creditors in early October and it was effective for up to 6 months.

Source - Reuters

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