Sharjah-based Dana Gas says it is still in discussions with investors to restructure a $920m sukuk (Islamic bond) that was due to mature on 31 October.

The company said in a statement that it planned to “reach a consensual solution to the restructuring of the sukuk, which it believes to be in the interest of all parties”. Political unrest in Egypt and the Kurdistan region of Iraq has led to delays in payments to Dana Gas for its gas production in those countries. As a result, it is unable to repay the sukuk on schedule.

Dana Gas appointed Germany’s Deutsche Bank, Blackstone Group and Latham & Watkins as advisers on the restructuring. Although the company and creditors are still in talks, unless progress on a deal happens quickly creditors could call a default on the sukuk. Sources close to the situation say creditors are currently reluctant to stop talking and call a default because it would begin a long and costly legal process of trying to recover assets to settle the debts.

It is one of the first times that a regional company has tried to restructure capital markets debt. During previous restructurings in Dubai, debt instruments were repaid on time and bank debt was restructured.