Dana Gas places $875m of Convertible Sukuk

The size of the issue was increased from its initial amount of $750m following strong market interest.

This is the first accelerated exchangeable bond in the Middle East and also the third largest convertible to be completed in the region.

The sukuk issue is part of Dana Gas' strategy to put in place the most efficient capital structure through broadening and diversifying the financing channels for the continued growth and expansion of the Company's activities.

The Sukuk exchangeable bond is one of the most sophisticated equity-linked structures to be issued, due to its combination of features including Shariah compliant and onward-starting structures, as well being the first Sukuk with delayed settlement.

The issue of the convertible sukuk offering was approved by the Company's shareholders at an Extraordinary General Meeting held in July.

"This is a landmark transaction that will propel the Company through its next phase of growth, as well as successfully position Dana Gas in international capital markets,"

said Mr. Neeraj Agarwal, Finance Director of Dana Gas.

"We are pleased to have launched this sophisticated and innovative transaction, and are also pleased with the strong investor interest in the unique identity of Dana Gas as a regional company focused on the Middle East's rapidly growing natural gas sector."

The Sukuk was structured as Sukuk al-Mudarabah and will mature in 2012. The terms of the Sukuk grants rights to Sukuk holders to exchange their Sukuk into ordinary shares of Dana Gas subject to certain conditions.

Dana Gas is currently active in all aspects of the growing natural gas business in several countries across the region, with major projects and operations in the UAE, Egypt and most recently in the Kurdistan Region in Northern Iraq, as well as new projects under development in other countries in the Middle East.

The Company's $1.1bn acquisition of Centurion Energy earlier this year placed Dana Gas as the sixth largest gas producer in Egypt, with further recent gas discoveries made as part of an active drilling program.

In April, Dana Gas also concluded important agreements for gas projects with the Kurdistan Regional Government of Iraq, with a first phase investment of approximately $400m.

Worldwide Islamic banking assets currently total around $500bn and are growing at over 15% per annum, with Islamic banks and financial institutions managing over $250bn of assets and a further $200 to $300bn managed by the Islamic subsidiaries of international bank.