Petroleum Africa
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Sunday, May 7, 2017
Dana Gas PJSC revealed that due to continued challenges it faces around cash collections and the resulting need to focus on short to medium term cash preservation, it will commence restructuring discussions with holders of its Sukuk from May 2013.
The company said it will be addressing the way forward on the Sukuk, which has a maturity date of October 31, 2017, in a practical manner that balances the interests of all stakeholders. The remaining profit payments will be addressed sensibly as part of the solution.
While the company has performed well operationally, the countries that it operates in are behind on paying the firm for its production. At year end, collections in Egypt amounted to $79 million, representing a realization rate of 64%, of which only $3.5 million were collected in US Dollars with the balance received in Egyptian pounds. The outstanding receivables as of 31st December 2016 stand at $265 million. The economic and currency crisis in Egypt persists and collections may therefore remain below expectations in the near term.
Collections from Kurdistan, improved in 2016 with local sales of liquid petroleum products and staged payments by the KRG for outstanding debt realising $101 million for Dana Gas. That said, the outstanding, now undisputed amount owed to the company by the KRG stood at $713 million (as of December 31, 2016). In addition, the Zora Field gas project in the UAE has experienced production difficulties and has not contributed as positively to Dana’s cash balance as had been projected.
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