Shuaa Capital is still in negotiations with noteholders following the maturity date of its $150 million bond on Sunday. A new deadline has been set for the end of this week, a bourse filing said today.  

Trading was suspended on the asset manager and investment bank on the Dubai Financial Market (DFM) on Monday due to failure to file audited financial statements for 2023.

A bourse filing from Shuaa said publication was pending finalisation of negotiations with creditors regarding debt restructuring aimed at reducing leverage and bolstering its capital base.

Its stocks reached all-time lows last month but saw a 14.9% bounce Friday amid market speculation about its future as the bond deadline approached.

Monday’s announcement follows reports on dealmaking reports service debtwire last week saying an ad hoc group of bondholders had rejected a Shuaa bid to amend the bond terms, which would have seen them receive company equity and cash of 20 cents on the dollar, claims Shuaa has not commented on after being approached by Zawya. 

Last month, Shuaa launched the bid to amend the terms of the outstanding bond following a five-month extension from October 31 2023.

Monday’s bourse filing said the outcome of the consent solicitation is expected to be agreed Friday April 5 with a general assembly for the entity anticipated to take place by the end of the month.

“Shuaa emphasises the critical importance of noteholders’ support for the ongoing restructuring proposal, which is integral to facilitating a third-party capital injection and restoring business stability and continuity.

“The proposed solution most importantly secures the going concern status of the company and offers the best available option to noteholders by offering cash settlement along with the opportunity to participate in the equity of the business.”

Shuaa and bondholders’ shared history

Zawya reported last year that one of the key bondholders in Shuaa Capital is GFH. In 2020, when the bond was issued, GFH’s chairman was Jassim AlSeddiqi, who was also Shuaa’s largest shareholder and CEO at the time. Contemporary GFH reports showed the investment at the time was $35 million, a figure that has since changed, according to Zawya's sources.

Gulf Business reported in 2017 that the two entities were considering a share-swap merger worth billions of dirhams and Shuaa company documents show that the current GFH CEO, Hisham Al Rayes, served on Shuaa’s board for four months during that year, but no such deal emerged.

(Reporting by Imogen Lillywhite; editing by Seban Scaria)