IslamicFinance.de

A High Court judge in London ruled in favour of creditors in a case regarding the validity of the purchase undertaking for about $700 million of sukuk issued by Dana Gas. The idea that Dana Gas has been able to assert for the past five months that its own sukuk were non-sharia-compliant has struck many observers as unusual. Judge George Leggatt said that Dana Gas' challenges to the validity and enforceability of the purchase undertaking were unfounded and declared the purchase undertaking for Dana's sukuk as valid and enforceable.

Dana Gas share prices fell 4.17% following Friday’s English High Court ruling against Dana Gas and in favour of bondholders. Danas said it plans to appeal the decision by the London court that declared the company’s $700 million sukuk valid and enforceable. Friday’s ruling was made in Dana Gas’s absence from the court. Dana Gas had earlier refused to repay debt owed to investors for two mudaraba sukuk worth $350 million each. The latest ruling does not mean that Dana Gas has to pay bondholders just yet, with another hearing in a UAE court scheduled for December 25.

The Board of Directors of Abu Dhabi Islamic Bank (ADIB) has accepted the resignation of Tirad Mahmoud from his position as Group CEO. Mahmoud has beon medical leave from March 2017. Khamis Buharoon, ADIB’s Vice Chairman, will continue as acting CEO. Mahmoud joined the bank as a CEO in 2008 and was able to grow ADIB from a domestic market player to a leading regional bank with presence in six countries and a customer base of around one million customers. ADIB has an asset base of more than AED121 billion. In its most recent quarterly results, ADIB reported a 13% rise in third-quarter net profit.

National Bank of Fujairah (NBF) announced the completion of a Shari’a-compliant bullion financing transaction with Malabar Gold. It is the first bullion financing in accordance with the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) standards on gold in the UAE. This partnership follows the launch of the AAOIFI Shari’a Standard on Gold in December 2016. The standard lays out a clear guidance on the permissibility to trade in gold in a shari’a compliant manner. It also enables Islamic finance institutions to develop new gold-based products and transactions. Vince Cook, NBF’s CEO, said he was delighted to be at the forefront of this major transaction in the gold and jewellery market. He thanked for the support of partners Malabar Gold, Amanie Advisors and World Gold Council.

An English High Court judge has ruled in favour of Dana Gas’s bondholders, reported the Financial Times.

More details at the source.

Even though its Tunis Financial Harbour (TFH) mega-project has barely got off the ground, Bahrain's Gulf Finance House (GFH) is already looking to acquire adjacent land.

Financial services company Saad has been ordered to pay around $668 million to Citicorp Trustee Company and Golden Belt Sukuk Company. Saad's obligations are tied to sukuk bond and linked to the leasing of land in Saudi Arabia. The judgment was handed down Friday in London's High Court, where Judge Peter Macdonald Eggers ordered Saad to honour its obligations.

Standard & Poor's downgraded Qatari real estate developer Ezdan Holding on Monday. Therefore, yields on the company's $500 million sukuk jumped by about 2 percentage points after the downgrade. S&P cut the Qatari company by two notches to BB from BBB-minus and revised its outlook to negative from stable. The rating agency cited a weakening of the company's financial risk profile partly caused by the neighbouring Arab countries' boycott of Qatar. Ezdan's sukuk, issued in 2016, were yielding around 6% last week, now the yield has surged to over 8%. The sanctions have worsened a slump in Qatar's real estate market. Housing and utility prices sank 4.7% from a year ago in September, their biggest drop for at least several years, and fell 0.7% from the previous month.

Dana Gas reported a steep rise in third-quarter profit, benefiting from a $1 billion payment as part of a settlement agreement with the Kurdistan Regional Government (KRG). The agreement boosted Dana’s third-quarter earnings and net profit for the nine-month period ending on September 30, which amounted to $125 million against $26 million during the same period one year earlier. The settlement led to a reversal of the provision for payments to the KRG, with the balance of unpaid receivables booked to new petroleum costs. The company is at the centre of a legal dispute after having refused to redeem $700 million in outstanding Islamic bonds claiming they are no longer sharia compliant. It has started legal actions in UK and UAE courts to avoid redeeming the sukuk. Dana claimed being confident pursuant to independent legal advice of prevailing in its interpretation of the outcome.

British High Court judge George Leggatt said that he would not further adjourn a trial in the Dana Gas case and would issue a judgement soon. Dana is claiming it does not need to redeem its $700 million sukuk, which matured at the end of last month, because the instruments became invalid under UAE law. Dana had asked for further postponement of the trial pending developments in a UAE court, where motions in the case have also been filed.

#Oman's Mazoon Electricity Company successfully priced its debut $500 million 10-year Sukuk offering. The Sharia-compliant Ijara structure was adopted for issue of the Sukuk Certificates and the profit rate was set 5.20%. The final order book had $5 billion from 300 orders, representing more than 10 times oversubscription. The final order book distribution by geography comprised of 47% from the Mena region, 17% Asian investors, 23% from European investors and 13% from US investors. The transaction marks the first international corporate Sukuk issue out of the Sultanate. The issuance is rated Baa2 (Negative) by Moody’s and BBB (Negative) by Fitch. A comprehensive global roadshow was conducted in Asia, UAE, London, Boston and New York. Mazoon CEO Zahir Abdulla Al Abri attributes the success of the Sukuk to the regulatory mechanism, support of the Government and consistent growth of the company.

Dana Gas reported a steep rise in third-quarter profit, benefiting from a $1 billion payment as part of a settlement agreement with the Kurdistan Regional Government (KRG). The agreement boosted Dana’s third-quarter earnings and net profit for the nine-month period ending on September 30, which amounted to $125 million against $26 million during the same period one year earlier. The settlement led to a reversal of the provision for payments to the KRG, with the balance of unpaid receivables booked to new petroleum costs. The company is at the centre of a legal dispute after having refused to redeem $700 million in outstanding Islamic bonds claiming they are no longer sharia compliant. It has started legal actions in UK and UAE courts to avoid redeeming the sukuk. Dana claimed being confident pursuant to independent legal advice of prevailing in its interpretation of the outcome.

Abu Dhabi Islamic Bank (ADIB) held forums on the international regulatory environment for banks from Sudan and Iraq to support their increasing integration into the global economy. The forums followed the lifting of the United States' longstanding sanctions against the government of Sudan on 12 October 2017. Andreas Meletiou, ADIB’s Head of Global Financial Institutions, said the seminars were equally important for transfer of knowledge and experiences, as well as for deepening networks. The two separate forums gathered around 50 bankers from each country to discuss the evolving international regulatory environment for financial institutions. They addressed issues such as Basel III and IFRS 9 requirements as well as anti-money laundering measures. ADIB, which has a large retail and corporate banking operation in its home market of the United Arab Emirates, also operates a wide international network, including Egypt, Iraq, Sudan and the United Kingdom.

Although Islamic banking and Sukuk comprise the lion’s share of Islamic finance assets, there are significant untapped opportunities in the securities, equity markets, investment funds, insurance and microfinance markets. For Islamic finance to flourish, time would be more valuably spent creating new financial products that are Shari'ah-based rather than adapting existing conventional products to become Shari'ah-compliant. The innovative magic is in the roots, not the branches. On 14 November 2017, the Dubai International Financial Centre (DIFC) will host the Global Financial Forum (GFF). The invited industry experts are set to provide valuable insights on the progression of the sector and innovation in Islamic finance.

The Islamic Corporation for the Development of the Private Sector (ICD) and Mizuho Bank have formalized the signing of a Murabahah deal. The financing is earmarked for the purpose of scaling up of ICD’s projects in its selected 55 member countries. The $150 million Murabahah agreement is the second bilateral Islamic facility that has been extended to ICD by Mizuho Bank. The agreement was signed by Khaled Al Aboodi, CEO of ICD and Shojiro Mizoguchi, CEO of Mizuho Bank. Al Aboodi expressed his strong support for the partnership. Shojiro Mizoguchi said he was very proud to continue to work with ICD and looking forward to leverage on each other’s expertise and experience.

Some of Saudi Arabia's most powerful men were arrested in October as part of a fight against corruption. The government freezed the accounts of the more than three dozen men totalling $33 billion of net worth. The series of arrests has implicated the country's richest people, including Prince Alwaleed bin Talal, Bakr Binladin, Mohammed Al Amoudi, Saleh Kamel and Nasser Al Tayyar. Prince Alwaleed bin Talal is No. 50 on the Bloomberg Billionaires Index ranking of the world's 500 richest people, with $19 billion. Two of the four Saudis on the Bloomberg index haven't been detained, hotel magnate Mohamed bin Issa Al Jaber, who has an $8.3 billion fortune, and Prince Sultan Bin Mohammed Al Kabeer, the biggest individual shareholder in food processor Almarai Co., who has $4.7 billion.

Saudi billionaire Maan Al-Sanea is accused in the English courts of a $650m (£495m) fraud that has triggered a battle between hedge funds and the French bank BNP Paribas. He was arrested by Saudi authorities in October on charges of evading justice and owing large sums of money to creditors. Maan’s Saad Group collapsed in 2009, triggering a long battle to recover billions he had shipped offshore to the Cayman Islands. The High Court trial concerns the arrangement of a $650m sukuk, which was paid to Mr Maan personally to lease land he owned. Judgment in a separate claim brought by the hedge funds against him is due on Thursday. Subsequent arrests of prominent Saudi businessmen sparked debate over whether the moves represent consolidation of power or a genuine crackdown on corruption.

Islamic banks in Bahrain have until June-end next year to fully comply with new standards mandated by Central Bank of Bahrain (CBB). According to CBB executive director for banking supervision Khalid Hamad, the new Islamic banking legislation, where independent external scrutiny is a mandatory requirement, will promote corporate governance and compliance with Basel III norms. Hamad said the CBB was also preparing comprehensive and detailed risk management legislation. According to him, Islamic investment banking needs to develop a sustainable business model as well as more mergers for a clear competitive advantage. To enhance governance and performance, Islamic banks are required to obtain a credit rating. The industry also needs to work on building the capacity of board members, senior management and officials, particularly those in risk management, through qualifications and training.

The Arab Petroleum Investments Corporation (APICORP) has launched a USD 500 million 5-year sukuk off its USD 3 billion Trust Certificate Programme. APICORP undertook extensive investor meetings at the beginning of October in Asia, in the UAE and in London. The extensive marketing explains the successful outcome which included a book in excess of USD 3.45bn from 215 investors. The final distribution was 41% MENA and 59% in Europe, Asia and off-shore US. CEO Ahmed Ali Attiga said that with over 200 investors APICORP had firmly planted its flag in the capital markets. He added that the success of this transaction was testament to APICORP’s impressive 40 year track record and Aa3 credit rating. Abrar Hussain, Head of DCM at Credit Agricole CIB, mentioned that the extensive set of investor meetings also contributed to the oversubscription of the sukuk.

Nasdaq Dubai has welcomed the listing of a $500 million Sukuk by APICORP, the development bank of the Arab world’s oil and gas industries. The transaction is APICORP’s second Sukuk listing on Nasdaq Dubai, as the first was in January 2016. The Sukuk was issued under a $3 billion Sukuk programme and is aimed at diversifying its funding sources. APICORP’s activities include equity investment, debt financing, financial advisory and energy research services. Sukuk listings in the Emirate currently totals at $52.97 billion. 11 Sukuk listings have taken place so far in 2017 on Nasdaq Dubai with a total value of $10.25 billion.