SHUAA Capital's New Convertible Bond Issuance
SHUAA Capital announces a strategic move with the issuance of a mandatory convertible bond, inviting both new and existing investors.
Summary
SHUAA Capital plans to issue a mandatory convertible bond to attract private investors and existing bondholders, aiming to strengthen its financial position.
SHUAA Capital PSC, a prominent asset management and investment banking firm based in the United Arab Emirates, has unveiled a strategic financial maneuver through the issuance of a mandatory convertible bond (MCB). This move is designed to attract both new private investors and existing bondholders, thus aiming to bolster the company's financial standing and liquidity.
The issuance of the MCB is aligned with Article 231 of the Federal Decree-Law No. 32 of 2021 concerning Commercial Companies, alongside the SCA's Resolution No. 22 of 2024. This regulatory framework provides a robust legal foundation for SHUAA's latest financial initiative, ensuring compliance and transparency in the process.
The strategic issuance is set to be a pivotal point for SHUAA Capital, given the company's existing USD150 million bonds issued by SHUAA Capital Bond 1 Limited. The MCBs are expected to convert into equity, offering an attractive proposition for investors looking to capitalize on SHUAA's growth trajectory.
For existing bondholders, the conversion offers a seamless transition into equity, potentially increasing their stake in SHUAA Capital’s future endeavors. Meanwhile, new investors are presented with an opportunity to enter a well-established financial entity with a proven track record in asset management and investment banking.
However, the implementation of this transaction is contingent upon shareholder approval. The General Meeting of SHUAA will play a crucial role in determining the outcome, as each resolution requires a majority vote in favor. The board of directors has expressed confidence in the proposal, recommending shareholders to vote in favor.
From an investment perspective, the issuance of MCBs by SHUAA Capital could be seen as a strategic move to enhance its capital structure and fuel future growth. Investors should consider the potential for equity appreciation and the strategic direction of the company. Given the company's established presence in the Middle Eastern financial landscape and its innovative approach to investment solutions, holding the instrument could be a prudent choice.
Overall, while the issuance of mandatory convertible bonds presents an opportunity for growth, investors should remain vigilant and consider the broader market conditions and SHUAA Capital's strategic initiatives before making any investment decisions.
Source
Summary
This document is a shareholder circular from SHUAA Capital PSC, a public joint stock company in Dubai, UAE, dated January 10, 2025. It addresses the recommended issuance of mandatory convertible bonds to new private investors and existing holders of USD 150 million bonds issued by SHUAA Capital Bond 1 Limited, in compliance with relevant UAE laws. The implementation of this transaction is conditional upon approval by a requisite majority at the SHUAA General Meeting. The document advises shareholders who have sold or transferred their shares to forward the document to the new owner. It also notes that approval by the Securities and Commodities Authority (SCA) only confirms the document meets minimum information requirements and does not imply endorsement of the bond issuance. The board of directors is responsible for the accuracy of the information, and shareholders are encouraged to read the entire document and accompanying materials. The document also highlights the need to comply with distribution laws in jurisdictions outside the UAE.
