UAE’s Dana Gas negotiating with IPR energy on sale of Egypt assets – sources

The United Arab Emirates-based energy producer Dana Gas is in talks over details of a sale of its Egyptian assets with Texas-headquartered IPR Energy over, three sources with knowledge told Reuters on Wednesday.

The talks are ahead of a repayment of some $300 million in debt in October.

Dana Gas – whose main assets are in Egypt and in the Kurdistan Region of Iraq – was seeking to raise over $500 million from the sale, but it will likely yield significantly less, Reuters quoted three sources as saying.

The energy producer declined to comment while IPR Energy did not immediately respond to a request for comment, Reuters said.

Dana has said earlier it would use the sale proceeds to pay $309 million in outstanding Islamic bonds, or sukuk, due at the end of October.

In August, the company announced around $19 million loss for the first half of the year, after a $37 million impairment charge related to oil and gas assets in Egypt affected by low oil prices amid the coronavirus pandemic.

It had $366 million in cash and cash equivalents at the end of June and, following a sukuk buyback worth $70.7 million after June 30, it had roughly $295 million, it added.

Earlier in July, the company asked its bondholders to provide information on their holdings, a move that some investors feared was a step towards a debt restructuring.

It also appointed financial firm Houlihan Lokey to advise it on the bonds, which it has already restructured twice.

Dana Gas, which bought back a total of $88.5 million of its sukuk this year, has stated that overall cost savings in profit payments and repayments at maturity were about $10 million.