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Friday, 17 November 2017

UPDATE 2-UK court finds for Dana Gas creditors in $700 mln Islamic bond case

UPDATE 2-UK court finds for Dana Gas creditors in $700 mln Islamic bond case:

"A London High Court judge has ruled in favour of creditors in a dispute over whether United Arab Emirates energy company Dana Gas must repay $700 million of Islamic bonds. Dana Gas had said it was under no obligation to pay bondholders because of changes in Islamic finance, but Judge George Leggatt ruled that the company’s challenges to the purchase undertaking behind the bonds were “unfounded” and that the agreement was “valid and enforceable”. The case, which Dana said it would continue to fight in Britain and the UAE, 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, to refuse to redeem the debt at maturity."



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Oil rises 2 percent, but still set for first weekly fall in six

Oil rises 2 percent, but still set for first weekly fall in six:

"Oil prices rose about 2 percent on Friday, capping five sessions of losses, on expectations of an OPEC deal to extend curbs on production and the shutting of a major U.S. crude pipeline.

Prices were still on track for their first weekly loss in six as rising U.S. output data was compounded by doubts that Russia would support an OPEC deal.

Brent crude oil LCOc1 was $1.07 higher at $62.43 a barrel by 11:20 a.m. EST (1620 GMT) while U.S. West Texas Intermediate crude (WTI) CLc1 rose $1.25 to $56.39 a barrel.

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Saudi Arabia's Expropriations Should Scare Investors - Bloomberg

Saudi Arabia's Expropriations Should Scare Investors - Bloomberg:

"The government of Saudi Arabia is reportedly offering to exchange the wealth of allegedly corrupt royals and officials for their freedom. This is a tactic that has been used by post-Soviet regimes, most widely in Georgia under President Mikheil Saakashvili, but also in President Vladimir Putin's Russia. While it can be effective in supplementing government coffers, it's not great for a country's institutions and business climate.

Saudi Arabia ended up with a budget deficit of $96.5 billion in 2015 (at the current exchange rate) and $83 million last year as it fought for oil market share with the U.S. shale industry and maintained low crude prices. Crown Prince Mohammed bin Salman was instrumental in changing that policy to a regime of hyped-up production cuts; now, he appears intent on plugging the deficit with infusions of what King Salman and the prince deem to be ill-gotten wealth to the tune of at least $100 billion. According to reports from Riyadh, people imprisoned in the capital city's Ritz-Carlton hotel -- a group including some of the country's wealthiest people -- are being told to cough up most of their assets, up to 70 percent in at least one case, in exchange for immunity. 

Saakashvili, who took over a largely bankrupt nation in 2004, fought corruption by similar methods. Since he wasn't a king with absolute powers, he pushed through changes to the country's criminal code allowing deals with justice that could replace any kind of punishment with a negotiated fine. By 2011, the year before Saakashvili's party lost a parliamentary election and he lost most of his power, 80 percent of criminal cases were resolved in this way, according to a Council of Europe report by Swedish diplomat Thomas Hammarberg. Responding to the report, the Georgian government disclosed a rare statistic: In 2010, it received 112.7 million lari ($63 million at that year's average exchange rate) from the plea agreements and court-imposed fines. That covered some 2 percent of government spending for the year.


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English court rules in favour of Dana Gas bondholders in key Islamic bond case

English court rules in favour of Dana Gas bondholders in key Islamic bond case:

"An English High Court judge has ruled in favour of Dana Gas’s bondholders in a high-profile dispute over the validity of $700m Islamic bonds, in what will be seen as a blow for a UAE-based energy company.

Mr Justice Leggatt ruled on Friday that certain terms of the English-law bonds obliging Dana Gas to repay bondholders were valid. The company had argued that the bonds were no longer compliant with Islamic law, leaving it with no obligation to pay.

“All the grounds on which Dana Gas has sought to challenge the validity and enforceability of the Trustee’s rights under the Purchase Undertaking to oblige Dana Gas to pay the exercise price are unfounded,” he said."



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Gulf carriers may be in focus under foreign airline U.S. tax exemption cut

Gulf carriers may be in focus under foreign airline U.S. tax exemption cut:

"A U.S. congressional proposal that would eliminate income tax exemptions for certain airlines could affect major Gulf carriers, potentially worsening an international spat between U.S. airlines and their Middle East rivals.

U.S. airlines have been petitioning the federal government for years to intervene in what they see as unfair competition by the three major Gulf carriers.

The proposal, tucked deep in the Senate tax-cut plan, calls for airlines headquartered in foreign countries to pay the U.S. incorporate tax rate if: 1) the carrier’s home country does not have an income tax treaty with the United States and 2) the carrier’s country of origin has fewer than two arrivals and departures, per week, operated by major U.S. airlines."



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Saudi Arabia swapping assets for freedom of some held in graft purge: sources

Saudi Arabia swapping assets for freedom of some held in graft purge: sources:

"Saudi authorities are striking agreements with some of those detained in an anti-corruption crackdown, asking them to hand over assets and cash in return for their freedom, sources familiar with the matter said.

The deals involve separating cash from assets like property and shares, and looking at bank accounts to assess cash values, one of the sources told Reuters.

Dozens of princes, senior officials and businessmen, including cabinet ministers and billionaires, have been detained in the graft inquiry at least partly aimed at strengthening the power of Crown Prince Mohammed bin Salman."



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Oil Pares Weekly Decline as Saudis Look to Dispel Russia Doubts - Bloomberg

Oil Pares Weekly Decline as Saudis Look to Dispel Russia Doubts - Bloomberg:

"Oil climbed, paring losses earlier this week, as Saudi Arabia moved to dispel doubts over Russia’s readiness to extend output curbs.

Futures rose 1.5 percent in New York, trimming the weekly decline to 1.4 percent, after Saudi Arabia’s Energy Minister Khalid Al-Falih said OPEC should announce an extension of output curbs when it meets on Nov. 30. Russia is said to be hesitant to commit to a decision so soon before the deal is set to end in March. U.S. crude output gained for a fourth week to the highest in more than three decades, according to government data on Wednesday."



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