Dana Gas, the Middle East’s leading private sector regional natural gas company, today announced that sukukholders overwhelmingly voted to approve the refinancing of the US$ 1 billion Trust Certificates (Sukuk-al-Mudarabah) issued by Dana Gas Sukuk Limited.
At the Company’s Extraordinary General Assembly Meeting (EGM) which was chaired by H.H. Sheikh Ahmed bin Sultan Al Qasimi, Honorary Chairman, shareholders present unanimously voted in favour of the transaction. At the Annual General Meeting (AGM) held earlier in the day, shareholders also passed all the resolutions.
Sukukholders with an aggregate holding of US$ 692.77 million voted, representing a quorum of 75.3% (minimum required to constitute the quorum was 51%). Sukukholders representing US$ 692.39 million voted in favour of the transaction, comprising 99.95% of the holdings of those present and voting (a minimum of 75% was required to approve the refinancing transactions). Shareholders present at the AGM also voted unanimously in favour of the Sukuk refinancing. The transaction is expected to close on or about 8 May 2013.
The terms of the transaction will lead to a reduction in the Company’s outstanding debt from US$ 1 billion to US$ 850 million as a result of a US$ 70 million cash pay-down and the cancellation of US$ 80 million of the existing Sukuk already owned by the Company. The remaining US$ 850 million will be split into two tranches: a US$ 425 million Ordinary Sukuk and US$ 425 million Convertible Sukuk, each with 5-year maturity to ensure long-term financing. The average combined profit rate of 8%, together with the lower debt amount of US$ 850 million, constitutes a lower debt servicing obligation on the Company as compared to the debt servicing obligations under the existing Sukuk.
Commenting on the Sukuk refinancing, HE Dr. Adel Al-Sabeeh, Chairman of the Board of Dana Ga s, said: “The successful approval of the Sukuk refinancing puts the Company in a strong financial position from which to pursue our growth strategy. The agreement creates a more flexible and sustainable financial structure and balances the interests of all stakeholders. This is an excellent outcome for the Company and its shareholders and is a sign of the confidence from the international investor community in the future of Dana Gas.”
At the AGM, shareholders were given an overview of the 2012 results. Dana Gas delivered another year of strong operating performance, with net profit growth increasing 20% to AED 605 million despite the challenging geo-political environment prevailing in the areas of operations. Cash on the balance sheet increased to AED 605 million, an increase of 47% on a year-on-year basis. The Company’s strategy enabled it to capture increased value from existing assets and with improved cost management, further strengthening the foundations for sustainable growth in the years ahead.
Cash flow from operations increased to AED 648 million in 2012 from AED 364 million in 2011 primarily as a result of higher level of collections in Egypt and Kurdistan when compared to 2011. The Company collected over AED 1.1 billion from its share of receivables of which AED 596 million was collected in Egypt and AED 525 million in Kurdistan, Iraq. Recently, Dana Gas announced further significant progress in receivables collections in the first quarter 2013, amounting to AED 271 million following positive discussions with relevant authorities in both countries.
Rahid Al Jarwan, Executive Director and Acting Chief Executive Officer said: “ 2013 has started with increasing production and growth in demand for gas in our core markets, including Kurdistan Region of Iraq. Strong market fundamentals and an improved balance sheet and cash position would allow us to pursue new opportunities in Egypt and Lebanon. We are also looking to further enhance our performance by focusing on our value-enhancing core assets, while pursuing growth opportunities.”
[mappress] LNG World News Staff, April 24, 2013; Image: Dana Gas