DUBAI, June 13 (Reuters) - Abu Dhabi’s Dana Gas said on Tuesday that it would propose a restructuring of its $700 million of outstanding Islamic bonds in a call with a committee of holders of the sukuk later in the day.
“Due to the evolution and continual development of Islamic financial instruments and their interpretation, the company has recently received legal advice that the sukuk in its present form is not sharia-compliant and is therefore unlawful under United Arab Emirates law,” it said.
“As a result, a restructuring of the current sukuk is necessary to ensure that it conforms to the relevant laws for the benefit of all stakeholders.”
Dana said it would propose exchanging the existing sukuk with new sharia-compliant instruments with four-year tenors. The new instruments would offer the right to profit distributions at less than half the rate of the current instruments, and would not feature any conversion into equity. (Reporting by Andrew Torchia, editing by Louise Heavens)