A decision by Abu Dhabi-listed Dana Gas to declare $700 million of its sukuk invalid has sent shivers through the Islamic finance industry, raising concern about the safety of sharia-compliant debt instruments in general, Reuters reported. Dana said on Tuesday it had received legal advice that its sukuk, or Islamic bonds, which mature in October, were not compliant with the Islamic sharia code and had become "unlawful" in the United Arab Emirates.

Dana Gas PJSC plans to more than halve profit rates on $700 million of its Islamic bonds after they were found to be non-compliant with religious law, adding a new twist to a debt restructuring initiated in May, Bloomberg News reported.

Dana Gas PJSC named legal and financial advisers to assess options for about $700 million in Islamic bonds due in October, according to a person with knowledge of the situation. Houlihan Lokey Inc. will serve as financial adviser and Squire Patton Boggs LLP will provide legal counsel, according to the person, who asked not be identified because the matter is not public, Bloomberg News reported. None of the companies commented.

In 2011, Etihad Airways Chief Executive Officer James Hogan hatched a bold strategy to catch up with the airline’s more established Persian Gulf rivals: buying stakes in smaller, cash-hungry carriers across three continents to cobble together enough passengers to propel the Abu Dhabi-based company into the ranks of the global aviation elite. But after more than $4 billion of share purchases, bond buyouts, and other investments, the wannabe airline superpower has little to show for its long-odds gamble, Bloomberg News reported.

Dubai-listed conglomerate Gulf General Investment Co(GGICO) said on Monday it expected to complete a restructuring of around Dhs2.36bn ($643m) in loans by next month. The firm, which has investments spanning financial services, property, hospitality, manufacturing and retailing, previously renegotiated Dhs2.8bn in financial commitments in 2012. But the subdued local economy prompted the company to revisit that debt restructuring last year.

The naming of a new boss at Etihad Airways presents the Gulf carrier with an opportunity to rethink its aggressive expansion strategy after the failure of minority-owned Alitalia underlined the big barriers to global growth, the International New York Times reported on a Reuters story. Ray Gammell was appointed interim CEO this week, days after Alitalia sought bankruptcy protection with $3.3 billion (£2.5 billion) of debt. He replaces veteran boss James Hogan.

Investors in United Arab Emirates construction stocks can remember the good days -- when oil above $100 a barrel encouraged a seemingly endless stream of lucrative projects, Bloomberg News reported. Now, with crude priced at half that, companies are trying to rebuild their balance sheets. The downturn has translated into pain for investors in two of the largest construction companies in the U.A.E. Arabtec Holding Co. has slumped 90 percent from its May 2014 record, while Drake & Scull International P.J.S.C. is down 78 percent from its June 2014 peak.

Dana Gas PJSC will ask bondholders to accept changed terms on $700 million of debt coming due in October as the energy producer based in the United Arab Emirates seeks to restructure debt for the second time in five years, Bloomberg News reported. Holders of the Islamic bonds, or sukuk, should form a committee to represent them in the planned discussions, Sharjah, U.A.E.-based Dana Gas said Wednesday in a statement to the Abu Dhabi stock exchange.

UAE residents are hopeful that new bankruptcy legislation will ease the burden on small business owners. After years of deliberations, in December the federal government introduced an insolvency law to ease the orderly unwinding of bankrupt companies, including protections for debtors. The law — still untested because of its newness — stays proceedings on bounced cheques if the debtor is in a court-approved insolvency process, the Financial Times reported.

Emirates, the world's biggest long-haul airline, said on Monday it was in the process of only a "modest restructuring," two months after it reported a 75 percent decline in half-year profits due to slower growth and increased competition, Reuters reported. Gulf carriers who spent years rapidly expanding into markets from South America to Africa are under pressure to adapt to weaker markets, overcapacity and a stronger dollar.