Dana Gas Misses $920 Million Deadline

Dana Gas, a Sharjah-based energy company with operations in the United Arab Emirates, Iraq and Egypt, said Thursday it failed to pay back a $920 million Islamic bond, or sukuk, that came due on Wednesday, The Wall Street Journal reported. The company is in discussions with holders of the debt to amend the terms of the sukuk and extend its maturity, according to a statement posted on the Abu Dhabi bourse website. Dana has a three-day grace period before it can officially be declared in default, according to a person familiar with the matter. Hammering out an agreement to amend the sukuk's terms and extend its maturity was in the interests of all stakeholders, the statement said. The sukuk has been a major source of concern for Dana as it grapples with a large backlog of late payments from governments in Egypt and Iraq's Kurdistan region. The Abu Dhabi bourse statement said political upheaval in the region had contributed to the, "extensively reported problems of payment delays where the company operates." In Egypt, Dana's main interest is in natural gas production in the Nile Delta, all of which is sold into the domestic market. Output in 2011 was 230 million cubic feet a day of gas plus 7,500 barrels day of natural gas liquids. Dana's struggles with late payments from Egypt were short-term and the government there had made, "significant efforts," to remedy a payment backlog, the statement said. Read more. (Subscription required.)