Sharjah-based energy firm Dana Gas has said that it has secured an “in-principle agreement” from its creditors on a plan to refinance a $1bn sukuk (Islamic bond) that the company had failed to repay on maturity on 31 October.

The company said that under the terms of the plan the $80m of the sukuk that Dana Gas currently holds will be cancelled, a partial repayment will be made to creditors, and two new sukuk will be issued to cover the outstanding balance of the debt. These will be split between a sukuk and a sukuk which has the option of being converted into equity in the company.

A profit payment, equivalent to interest in a conventional bond, that was due on 30 October has been paid by the company and a standstill agreement reached that commits the firm to continuing to pay future profit payments and creditors to refrain from taking legal action against the company. The standstill will remain in place while creditors and the company finalise the terms of the sukuk refinancing.

The company is being advised by Germany’s Deutsche Bank and the US’ Blackstone Group and Latham & Watkins on the restructuring of the sukuk.