United Arab Emirates-based Dana Gas said on Thursday it plans to use proceeds from the sale of its Egyptian assets to pay down its sukuk, also known as an Islamic bond.
“If a sale of these assets were to go ahead the proceeds of the sale would be used to pay down the sukuk as required by the terms of the sukuk,” Dana Gas, which is listed in Abu Dhabi, said in a bourse statement.
The company, which operates concessions in Iraq’s Kurdish region and Egypt, had earlier said it would finalise the sale by the end of March. But it then delayed a decision on whether to sell its Egyptian assets because of the market turmoil caused by the coronavirus outbreak, two sources close to the talks told Reuters earlier this month.
Meanwhile, shareholders of Dana Gas gave their green light for a feasibility study to separate the oil firm’s upstream and midstream businesses in a demerger.
During the company’s annual general meeting on Wednesday, shareholders also approved a proposal to distribute a cash dividend of 5.5 fils per share for the financial year ended December 31, 2019. The company said a demerger would create two publicly traded companies on the Abu Dhabi Stock Exchange.
“Under the plan, existing shareholders would own shares in both the upstream business, which comprises operations in the Kurdistan Region of Iraq and Egypt, and the midstream business, which will hold the UAE Gas project that is currently awaiting arbitration decision or award,” the company said.
Currently, the company owns upstream oil and gas producing assets including Dana Gas Egypt and a 35 per cent stake in Pearl Petroleum, its Kurdistan Region of Iraq E&P focused business. These assets will be collectively known as the upstream business.
Source Reuters