UAE-based natural gas firm Dana Gas will not repay a $920 million convertible Islamic bond when it matures on Wednesday and has reached a standstill agreement with bondholders, three sources said.

Sharjah-based Dana, hit by payment delays from Egypt and Iraq's Kurdistan region, had a $1 billion sukuk maturing on Oct. 31. It repurchased about $80 million of the sukuk in 2008, leaving $920 million outstanding.

The five-year sukuk, which was issued with a 7.5 percent coupon, has gained international interest as a large chunk of the debt is owned by large investment firms including BlackRock Inc, Ashmore Group and Spinnaker Capital.

There is "absolutely no chance" of a white knight swooping in to repay the bond by the due date, a source close to the talks said. In 2009, the Abu Dhabi government stepped in at the eleventh hour to help Dubai repay developer Nakheel's $4.1 billion Islamic bond.

The sources said Dana, in which Crescent Petroleum owns a 20-percent stake, reached a standstill with creditors in early October and it was effective for up to six months.

Some creditors are preparing for a potential "post-default scenario", one source familiar with the discussions said, in which no deal would be reached at all.

Dana is to issue a statement on Wednesday or early Thursday detailing its plans on restructuring the bond, two sources said. The sources spoke on condition of anonymity as the matter is not public. Dana Gas declined to comment. – Reuters