Dana Gas Announces Terms of USD 1 Billion ... - LNG World News

Dana Gas PJSC, the Middle East?s first and largest private sector natural gas company, announced the detailed terms, conditions and implementation information for the refinancing transaction in relation to its US$1 billion 7.5% Sukuk-al-Mudarabah due 31 October 2012.

Key Transaction Highlights:

• Lock-up and Standstill Agreement signed by the Ad Hoc Committee of Sukukholders, which represents the majority of the outstanding principal amount of the Existing Sukuk. Subject to the terms of the Agreement, the members of the Ad Hoc Committee have undertaken to vote in favour of the Transaction
• Reduction in the Company?s outstanding debt from US$1 billion to US$850 million via US$70m cash pay-down and cancellation of another US$80 million of the Existing Sukuk already owned by the Company
• Remaining US$850 million split into two tranches to ensure potential dilution for shareholders remains substantially similar to current levels: a US$425 million Ordinary Sukuk and US$425 million Convertible Sukuk (together the ?New Sukuks?), each with 5-year maturity to ensure long-term financing
• The average combined profit rate on the two New Sukuks is 8%, representing a slight increase over the Existing Sukuk profit rate of 7.5%
• This average 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
• The security package available to holders of the New Sukuks will be enhanced by US$300 million of value (inclusive of security over receivables of the Company?s Egyptian assets), but is restricted to the Company?s Egyptian assets and certain UAE assets
• The Conversion price of the Convertible Sukuk has been set at a 50% premium to the 75 calendar day volume-weighted average price, measured over a period commencing on 1 December 2012 (with a floor of AED 0.75 and cap of AED 1.00)
• Dana Gas has the option to pay down the outstanding principal amount of the New Sukuks prior to the new maturity date of 31 October 2017, subject to the applicable call premia on the Ordinary Sukuk and the soft call provisions on the Convertible Sukuk.

Dr. Adel Khalid Al-Sabeeh, Chairman of the Board of Dana Gas said, ?We believe that the terms being announced today represent a comprehensive, long-term solution which balances the interests of all stakeholders. The Board plans to secure necessary stakeholder consents for implementation of the Transaction, while the Company continues to focus on achieving its growth potential over the coming years and continue to realise value.?

Rashid Al-Jarwan, Executive Director and Acting Chief Executive Officer of Dana Gas said: ?Dana Gas has a robust asset base and has successfully grown revenues, production, reserves and asset values consistently over the last 5 years, in line with our strategy. The Company?s liquidity constraints were caused by well-known external factors, and we believe that these revised terms of the New Sukuks place Dana Gas on a firm foundation for further growth and progress.?

Next Steps

• In order to successfully complete the Transaction, the Company will seek the consent of the shareholders, existing sukukholders, and the relevant regulatory authorities. It is currently expected that the Transaction will be completed early in the second quarter of 2013.
• The Company currently intends to schedule an extraordinary general meeting (?EGM?) in the first quarter of 2013 to request shareholder approval of the terms of the Transaction. The request to the shareholders for an EGM will be accompanied by a description of the terms of the Transaction that require such approval.
• Similarly, the Company will seek consent from existing sukukholders for the proposed Transaction at a meeting of sukukholders in the first quarter of 2013. The request for sukukholders to approve an Extraordinary Resolution will also be accompanied by a description of the terms of the Transaction.
• The Company will also, in accordance with its disclosure obligations under the ADX listing rules as well as the rules of the London Stock Exchange, keep all relevant parties informed of any material events.
• If any of the terms of the Transaction as described above are amended in consultation with, and with the agreement of the Ad Hoc Committee, such amendments will be communicated to all relevant stakeholders in accordance with all applicable laws before the consent of such stakeholders is sought for the Transaction.
• For the period from 31st October 2012 to closing, Existing Sukuk holders will receive a profit payment of 8% based on aggregate principal amount of the Existing Sukuk (payable at closing)

The Company is being advised by the Blackstone Group International Partners LLP, Deutsche Bank (as Dealer Manager) and Latham & Watkins LLP. The Ad Hoc Committee is being advised by Moelis & Company UK LLP and Linklaters LLP.

LNG World News Staff, December 10, 2012

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Source: http://www.lngworldnews.com/dana-gas-announces-terms-of-usd-1-billion-sukuk-refinancing-uae/

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