IslamicFinance.de

The standoff between Dana Gas PJSC and its bondholders carries on after the company that’s trying to void $700 million of its own debt was said to believe investors may even have to pay the company.
Dana Gas says a court battle with holders of the Islamic securities, or sukuk, may see it having to return less than 10 % of the amount it borrowed. In a second scenario, it believes creditors may have to pay it as much as $150 million, and that the case may last more than 10 years. The Gas company had announced plans to restructure the debt in May, this week retracted an offer to replace the bonds and is pursuing a resolution in court. It said in June the debt was no longer Sharia-compliant. Investors questioned the validity of the claim since neither sukuk regulations nor UAE laws governing the matter have changed since they were issued in 2013.
“You cannot in any circumstance, in whatever structure, borrow money and then say something changed and what I issued is no longer a debt obligation, therefore I don’t owe you money,” said Abdul Kadir Hussain, the head of fixed-income asset management at Arqaam Capital Ltd, which holds some of the securities. “It doesn’t work that way. If any courts decided that, it would do significant damage to the Islamic capital markets.”