Abu Dhabi-listed Dana Gas soars after Kurdistan deal
Now Reading
Abu Dhabi-listed Dana Gas soars after Kurdistan deal

Abu Dhabi-listed Dana Gas soars after Kurdistan deal

Iraqi Kurdistan agreed to immediately pay Dana’s gas production consortium $1bn to settle a London court case last week

Reuters

Stock markets in the United Arab Emirates were mostly quiet on Monday as they resumed trading after a long holiday weekend for Eid Al Adha, but Abu Dhabi-listed Dana Gas soared after it agreed on overdue payments from Iraqi Kurdistan’s government.

Dana jumped 14.1 per cent to 0.73 dirhams, its highest level since early July, and was by far the market’s most heavily traded stock, accounting for over half of the day’s volume in Abu Dhabi.

Iraqi Kurdistan agreed to immediately pay Dana’s gas production consortium $1bn, including $400m that will be used for investment in the region; Dana will receive 35 per cent of the money.

Read: Kurdistan pays $1bn to Dana Gas, partners to settle London case

In addition, $1.24bn will be reclassified from debt owed by the government to outstanding costs to be recovered by the consortium from future revenues.

“Overall, we view this as a major positive development for Dana Gas,” said Allen Sandeep, head of research at Cairo-based Naeem Brokerage, predicting the firm’s credit rating would leap.

The price of Dana’s convertible sukuk due on October 31 climbed to 77.92 cents on the dollar bid after the Kurdistan deal was announced late on Wednesday from 72.88.

The Kurdistan payment will boost Dana’s cash balance, which was $337m at the end of June. It is not clear that it will make any difference to the dispute over the company’s $700m of outstanding sukuk, which Dana is refusing to repay on the grounds that they have become invalid.

Read: London court to hear Dana Gas sukuk case in September

The company, which is fighting its case in courts in London and the UAE, declined to comment on whether the Kurdistan deal might affect the case in any way.

But Sandeep said the main benefit of the deal for Dana was that it would allow the consortium to expand its production at the huge Khor Mor and Chemchemal fields. Initial indications are that gas production at Khor Mor will rise by 160 per cent to 500 million cubic feet per day in two years, he said.

Other Abu Dhabi stocks were much more subdued, with the index rising only 0.3 per cent.

In Dubai, the index slipped 0.1 per cent but it closed well off the day’s lows and trading volume rose, which were positive technical signs.

DAMAC Properties dropped back 1.5 per cent but the most heavily traded stock, builder Drake & Scull, added 1.3 per cent.

Stock markets elsewhere in the Gulf and in Egypt remained closed for Eid and will reopen later this week.


© 2021 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top