Dana Gas, a MENA independent natural gas exploration and production company, has proposed a restructuring to holders of the $700m of its Sukuk maturing in October 2017. Its proposal is on the basis that these Sukuk are no longer Shari’ah compliant because standards of interpretation have changed since they were issued in 2013, reported CPI Financial.

Dana Gas is effectively attempting to reduce its finance costs by issuing lower yielding Sukuk with fresh stamps of Shari’ah approval, 4-Traders informed.

Restructuring discussions have been ongoing since May and follow the company’s multi-year difficulty in collecting cash from quasi-sovereign counter-parties in Egypt and the Kurdistan Region of Iraq (KRI).

Dana Gas is headquartered in Sharjah in the UAE and has operations in the UAE, Egypt, and the KRI.

Dana Gas is seeking to have its existing Sukuk declared invalid in a UAE court, even though the Sukuk are governed by UK law and the assets underpinning them are governed by UAE law. The court has granted Dana Gas an injunction protecting it from claims until the case is decided. The first hearing of the case is scheduled for end of December 2017.