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Dana Gas buys back $133m sukuk

SHARJAH, March 17, 2019

UAE-based Dana Gas, a leading natural gas company has now bought back a total of$133 million Sukuk in connection with Dana Gas’s 4 per cent Nile Delta Sukuk Ltd Certificates issued by Nile Delta Sukuk Ltd.

The buyback has reduced the size of the Sukuk from $530 million to $397 million and was achieved at an average price of 92.1cents.

The company has now satisfied the commitment to buyback c. $100 million of Sukuk following the consensual restructuring of the Sukuk in 2018 and has also met the threshold amount of outstanding Sukuk which allows the company to continue to pay the Sukuk profit rate at 4 per cent pa rather than increase to 6 per cent per annum (pa).

The company will save a total of $21 million by buying back the total of $133 million of its Sukuk in the market below par and by future profit rates savings on those bought back Sukuk.  In addition, by maintaining the profit rate at 4 per cent pa the company will make a further saving of $8 million.

The total saving is therefore expected to be $29 million, which is in addition to the significant saving of $35 million per annum achieved at the time of the restructuring. The company will continue to act opportunistically with regard to further Sukuk buyback.

In addition, the Board of Directors has recently approved the Board recommendations to the company’s AGM, which included a proposal for a share buyback and accordingly shareholders’ approval will be sought at the company’s General Meeting in April. The company will seek permission to repurchase up to around 690 million of Dana Gas shares on Abu Dhabi Exchange, which would correspond to 10 per cent percent of the company’s total share capital.

The Board of Directors believes the company is currently undervalued and that a share buyback program represents a way of enhancing shareholder value, a company statement said.

The Board of Directors of Dana Gas has also recently announced its intention to continue with its stated dividend policy. It will also therefore propose to the General Meeting of Shareholders the payment of a cash dividend of 5.5 fils per share, a 10 per cent increase compared to the 2018 dividend.  – TradeArabia News Service




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