PC:
Shuaa Capital will conduct the issuance in two distinct tranches: the first tranche, which is open to new investors, is priced between AED 85 million and AED 150 million, while the second tranche, reserved for noteholders of the entity’s expired bond, is set to a maximum value of AED 267.1 million. Both tranches are anticipated to be formally issued on or before March 18, 2025, subject to the final confirmation of SCA. The offering is going to be private placement, and after the issuance, the bonds will be converted into equity at AED 0.32 per share.
This conversion price is a higher valuation than Shuaa’s own market share price, which stood at AED 0.224 on Monday. The decision has shown the expected confidence in the future growth of the company while stabilizing the company’s financial position and creating long-term value for its shareholders.
In an earlier statement, Shuaa had confirmed that binding commitments from three important entities to subscribe to the new investors‘ tranche had been put in place. They include Eshraq Investments, which is listed on the Abu Dhabi Securities Exchange; United Motors & Heavy Equipment Company LLC, part of the Abu Dhabi-based conglomerate Darwish bin Ahmed & Sons Group; as well as the Al Baher Real Estate Development Company LLC. The participation of these entities is expected to derive optimal benefits from the capital optimization plan and further stabilize Shuaa’s financial situation.
Shuaa’s latest move is a bigger restructuring exercise, which is intended to bolster its balance sheet while working on enhanced liquidity levels and ensuring sustainable growth. The issuance of mandatory convertible bonds represents a strategic plan to reduce financial obligations while simultaneously creating a good perception in the mind of the investor. The conversion to equity will, by virtue of its structure, reduce debt obligations and at the same time work towards enhancing the market valuation of the Quraysh-Capital in due course.
Shuaa expects this capital restructuring initiative to have a huge effect on its financial health and stock in 2025 since everyone is following the company’s next steps. With all regulatory approvals pending and a bond issuance almost there, the strategic financial decision-making of Shuaa Capital, however grand or simple, in 2025 will really carve how its long-term trajectory and competitiveness will take shape in the market.
