A US$ 140m stake in was in the market on Thursday evening with Dana Gas selling a 1.6% stake with a discount of up to 5.5% in an accelerated book-building to a group of institutional investors, Euroweek reported. According to Bloomberg, there is a 3-month lock-up period for the rest of Dana’s shares (another 1.4%).
Our view:
Given Dana’s financing problems this threat has been on and off the table for a while. In October, Dana Gas missed payments on nearly US$ 1bn of Islamic bonds. Therefore, the company entered a restructuring deal with sukukholders, averting a potential seizure of its energy assets. This trasaction now may be part of the restructuring deal. Although details are scarce, the news is clearly negative for . In the worst case scenario, we may see the share price to drop 5.5% in today’s trading, equivalent to the discount Dana offered to investors. Although we currently ascribe no value to Pearl Petroleum, another interesting implication of this latest transaction hangs over the future financing of the develpment of Khor Mor and Chemchemal giant gas fields (owned by Pearl Petroleum in which Dana Gas is the largest shareholder with 40% stake and purchased 10% stake for 6.27m own shares, or ca. US$ 350m at that time, in May 2009).