Abu Dhabi-listed Dana Gas said on Wednesday it had obtained an injunction in a United Arab Emirates court blocking claims for payments on its $700m of outstanding Sukuk.
The Sharjah Federal Court of First Instance issued the injunction pending a ruling on Dana’s application to have the Sukuk, which are due to mature in October, declared unlawful and unenforceable.
An initial hearing on the application is scheduled for December 25 this year, the company said.
Dana announced on Tuesday that it had recently received legal advice that its Sukuk were not sharia-compliant and were therefore “unlawful” in the UAE.
The company said it would therefore halt payments on the Sukuk and proposed that creditors exchange them for new Islamic instruments offering much lower profit distributions – less than half the rates of the existing Sukuk.