London High Court rules in favor of Dana Gas creditors in Islamic bond case

Dana Gas' building in Cairo. (Reuters)
Updated 18 November 2017
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London High Court rules in favor of Dana Gas creditors in Islamic bond case

DUBAI: A London High Court judge on Friday ruled in favor of creditors in a case over whether energy company Dana Gas must repay $700 million of Islamic bonds, a copy of the ruling seen by Reuters showed.
The case is being closely watched by the global Islamic finance industry because some investors think it could set a precedent for other issuers of Islamic bonds or “sukuk.”
Dana has said it does not have to redeem the bonds because it claims changes in the interpretation of Islamic finance over the past few years means the securities are no longer Shariah-compliant and have become unlawful in the UAE where Dana Gas is based.
Dana could not immediately be reached for comment on Friday.
The judge said in the ruling that Dana Gas’ challenges to the validity and enforceability of the purchase undertaking of the bond were “unfounded” and declared the purchase undertaking for Dana’s sukuk as valid and enforceable.
A source familiar with Dana’s position said the company would appeal the court ruling, and that court proceedings in the UAE to declare the Islamic “mudaraba” structure of the sukuk invalid would continue.
The total of Islamic bonds globally is close to $370 billion. Islamic finance follows religious principles which includes bans on speculation and with interest-bearing products deemed off-limits.
A trial on the validity of the sukuk started at a London High Court in September but injunctions issued by a court in the UAE emirate of Sharjah have slowed proceedings.
—  REUTERS


Passenger numbers rise at Dubai International Airport

Updated 41 min 20 sec ago
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Passenger numbers rise at Dubai International Airport

  • Operator welcomes monthly jump after travel decline in past year
  • Dubai Airports launched its Strategic Plan 2020 in 2011 with the aim of increasing passenger capacity from 60 million a year to 90 million by 2018

LONDON: The number of passengers passing through Dubai International Airport rose by 2.1 percent in October compared with the same month last year, the operator Dubai Airports said on Monday.

The increase follows a drop in passenger traffic in September and a wider slowdown in the number of travelers passing through the emirate’s airport over the past year.

“Dubai International has been on record stating that passenger growth would be somewhat lower than in previous years, so this current performance is in line with my expectations,” said aviation analyst Saj Ahmad from Strategic Aero Research.

“That said, the airport has still grown over 2017 and will likely eclipse its 2018 target of handling over 90 million passengers and remain the world’s busiest international airport,” he said.

Dubai Airports CEO Paul Griffiths told a conference in Dubai last month that he expected just over 90 million passengers to use the airport this year, according to Reuters.

A total of 7 million passengers used the airport in October, compared with 6.9 million in the same month last year.

In September, passenger traffic fell by 0.2 percent compared with the previous year. The decline was blamed on the Eid Al-Adha holiday — with an associated spike in travel — falling in September last year.

Total passenger traffic in 2017 rose by just 5.5 percent year-on-year to reach 88.24 million people. This is a slower rate of growth than the 7.2 percent increase in 2015-16 and the 10.7 percent jump recorded between 2014-2015.

Dubai Airports launched its Strategic Plan 2020 in 2011 with the aim of increasing passenger capacity from 60 million a year to 90 million by 2018.

Under the strategy, the number of airport stands has been increased and terminal buildings expanded.

As demand grows, further work on the airport’s infrastructure will be needed, said Ahmad.

“Demand is not infinite — the airport is operating at nearly 98 percent capacity, so it stands to reason that only so much growth can be absorbed,” he said.

DXB handled 237,499 tons of cargo in October, a 2.5 percent increase on the previous month. Overall cargo volumes have fallen year-to-date by 0.9 percent to 2.1 million tons.