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DUBAI, May 11 (Reuters) - United Arab Emirates’energy producer Dana Gas has started refinancing discussions with the holders of its $700 million sukuk maturing in October this year, the company said in a statement on Thursday.
The company, which has faced a cash shortage after failing to receive payments from investments in Egypt and Kurdistan, had recently announced a plan to begin talks on the restructuring of the sukuk which was issued in May 2013.
The lack of collections had raised concerns over the company’s ability to repay the dollar sukuk over the past few months, which put downward pressure on the price of the company’s outstanding Islamic debt.
Dana Gas’ chief executive Patrick Allman-Ward did not respond to questions related to the state of the restructuring talks during a media call on Thursday.
The energy producer in April repaid an outstanding $60 million loan for its Zora gas field project in the UAE to avoid a covenant breach on the facility, the CEO told reporters after the company published its first-quarter results.
The company reported net profit of $11 million in the three months ending March 31 versus $6 million during the same period a year earlier. Profits rose by $4 million quarter on quarter, partly in response to increased production, principally in Egypt, and higher realised prices, it said.
Dana is owed receivables of about $1 billion from Egypt and the Kurdistan Regional Government. Its cash balance as of the end of March was $298 million, slightly below $302 million as of the end of last year.
In an effort to focus on short- and medium-term cash preservation, the company reduced its operational and capital spending in the first quarter. In Egypt, it only worked on projects that were already in progress and those related to maintaining plant asset integrity and safe operations. (Reporting by Davide Barbuscia. Editing by Jane Merriman)