Dana Gas PJSC, the largest independent oil and gas company in the UAE, has successfully completed the restructuring of its US$1 billion Trust Certificates (sukuk al-mudarabah). The restructuring, the first of its kind in the Middle East, was implemented through the exchange of Dana Gas’ existing sukuk certificates with two tranches of new sukuk certificates (one convertible and one non-convertible tranche), each with a 5 year tenor.
The shareholders of Dana Gas, as well as the holders of the existing sukuk, had previously approved the restructuring by a resounding vote. The restructuring of Dana Gas’ sukuk was closely watched by the market participants as the first consensual restructuring of a sukuk implemented in this manner and its particular relevance to the Middle East market given the number of liabilities of a diverse variety of issuers that are expected to fall due in the near future.
The restructuring was particularly complex on account of the Sharia’ah structure underpinning the existing sukuk and Dana Gas’ strong desire that the restructuring be implemented through a Sharia’ah-compliant method.
Bryant Edwards, who led the deal team at Latham & Watkins, commented: “I am particularly pleased with the results of this landmark transaction and the possibilities that it opens up for other issuers who may wish to restructure their bond or sukuk liabilities in this manner. Dana Gas has shown the way and introduced to the Middle Eastern market the methods of restructuring that are already well-accepted in the European and US markets.”
In addition to Edwards, the Latham team included lawyers from the firm’s Dubai and London offices.
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