Certificate holders have voted overwhelmingly in favour of refinancing a $700 million sukuk issued by Dubai-based energy company Dana Gas.
The consent of more than 90% of certificate holders, which exceeds the 75% threshold for approval, could bring an end to a long-running dispute that threatened to derail the growing international investor interest in Islamic finance.
The dispute was sparked by a decision by Dana Gas to withhold dividends on its sukuk on grounds that the instruments were no longer sharia-compliant. The case raised a number of concerns among international investors regarding the enforcement of creditors’ rights and the lack of standard sharia codification and definitions.
Under the new restructuring, certificate holders will be given the choice of exiting their principal investment in return for 90.5 cents per dollar of the face value of their investments or accepting new sukuk certificates with a 4% coupon rate and three year tenor.
The vote was welcomed by Dana Gas chief executive Patrick Allman-Ward. "We are extremely pleased to have received consent from an overwhelming majority of sukuk certificate holders, thus confirming the company’s belief that the proposed terms of the deal were fair and in the best interests of all," he said.
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