Dana Gas said it is withdrawing an offer to shareholders of its $700 million sukuk in an ongoing dispute and would pursue a resolution of the matter through courts. "On 27th July 2017, Dana Gas met with representatives of the Ad Hoc Committee of Sukukholders and advised them that its previously contemplated offer is now off the table, and that the Company is pursuing litigation-driven outcomes," the company said in a statement to the Abu Dhabi stock exchange where it's listed in response to a request. The company said it had actively sought consensual agreement with shareholders of the sukuk and attempted to engage directly with the Ad Hoc Committee to pursue an offer but that these attempts were rejected. "Dana Gas management appears to be playing offensive in seeking to reach an agreement with sukukholders," said Sanyalaksna Manibhandu, head of research NBAD Securities "By pursuing litigation-driven outcomes, the company may avoid paying profit to sukukholders in 2017 and bypass the principal repayment at the end of October 2017, since litigation could take until 2018 to complete. While this may look positive for Dana Gas in the short term, sukukholders might get the courts to see non-payment of profit and missing the principal repayment in October as default events." Dana Gas has been in a testy standoff with representatives of its sukukholders since May, when it said it wouldn’t be able to repay on time this year, and sought to negotiate a refinancing on less favourable terms. The most controversial aspect has been its June 13 move, seeking a Sharjah court ruling that declares its two outstanding mudarabah-type sukuk non-compliant with Sharia law. The chief executive of Dana Gas, Patrick Allman-Ward, yesterday made a direct plea to holders of its US$700 million sukuk to hold talks over new financing terms. In a scheduled open phone call, Mr Allman-Ward set out to explain why the Sharjah-based company had its own sukuk declared non-compliant with Sharia law earlier this year, why it felt that new, less attractive terms were justified and why Dana Gas was in a much better position now - at least in terms of its potential assets value - than when the company was forced to restructure its Sharia bond financing five years ago under the duress of a default declaration. On July 16, Dana Gas said in a statement that a court ruling by the High Court of Justice in London on June 5 was favourable to it because it upheld an injunction preventing bond holders enforcing its claims. But at the same time the judge ordered Dana to cancel an injunction in a Sharjah court where it has been trying to deem the sukuk unlawful.