Abu Dhabi-listed Dana Gas has agreed a $1bn restructuring of a sukuk (Islamic bond) that it failed to repay when it matured on 31 October.

The restructuring involves the issue of two new sukuk, each $425m with a five-year maturity, although one is convertible into equity. The company will cancel $80m of the sukuk it already owned, and the final $70m will be repaid. Dana Gas said that a greater repayment could be made by the time the restructuring is completed, expected to be in the second quarter of 2013.

The new sukuk will pay investors a return of 8 per cent, higher than the 7.5 per cent on the existing debt.

Shareholders will have to agree to the restructuring before it can proceed at an extraordinary meeting scheduled for the first quarter of 2013.

Dana Gas said on 7 Novemebr that it had reached an agreement “in principle” with sukuk holders for the restructuring. The main investors in the sukuk are the US’ Blackmore and UK’s Ashmore Group.