Dana Gas, which missed sukuk payments in October, will pay bondholders $70 million in cash and split the remaining Shariah- compliant debt into $425 million of convertible bonds and an ordinary sukuk of equal value, the United Arab Emirates fuel producer said in a statement. The five-year convertible bonds will pay a profit rate of 7 percent and the ordinary sukuk 9 percent. That compares with 7.5 percent on the existing sukuk.
"It's positive for the creditors because there is no reduction in the principle amount and the process was done relatively quickly," Abdul Kadir Hussain, chief executive officer at Mashreq Capital DIFC in Dubai, said by phone. "The cost is fair because this is a company that went into forced restructuring and so it should pay more than the market average."
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