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Investment platform Shuaa Capital’s board of directors approved the issuance of two tranches of mandatory convertible bonds (MCB), with a total maximum value of AED 425.5 mn, according to a statement (pdf). The bonds will be issued through private placement, subject to shareholder and regulatory approvals.
The details: The first tranche will include bonds valued at up to AED 150 mn, offered to all investors in Shuaa. A follow-up issuance with a maximum value of AED 275.5 mn will be offered to the “existing bondholders of the outstanding bonds issued by a Shuaa-related special purpose entity,” the disclosure reads. Both tranches will be convertible into shares at a rate of AED 0.32 per share.
We knew this was coming: The firm revealed plans earlier in May to issue a total of AED 642.5 mn of mandatory convertible bonds as part of its capital optimization plan, with the bond issuances pending regulatory approvals. The MCB issuances are to be the final step in the capital optimization plan, according to the statement.
IN CONTEXT- Shuaa has been undergoing major restructuring after substantial losses in 2023. Shuaa reached an agreement with bondholders in April to extend the payment terms for some USD 150 mn worth of bonds, and appointed a new management team with Wafik Ben Mansou as CEO as part of its capital optimization plan. The investment bank has fully settled around AED 500 mn (USD 136 mn) in margin facilities with multiple UAE banks. Shuaa also finalized an agreement with its senior creditor last week to restructure AED 208 mn in outstanding facilities.
ALSO- As part of Shuaa’s ongoing restructuring efforts, Ahmed Al Ahmadi (LinkedIn) will step down from his roles as Managing Director and Board Member, effective December 30.
