Shuaa Capital Issues $97.7 Million in Convertible Bonds Amid Debt Restructuring

Deal News | Mar 19, 2025 | Zawya

In a significant development, Dubai-listed investment bank Shuaa Capital has issued $97.7 million in mandatory convertible bonds (MCBs) following a year-long debt restructuring. This issuance was divided into two tranches: AED 274 million was allocated to existing noteholders of the company's $150 million bond, maturing at the end of March and AED 85 million to new investors. Existing noteholders, including Bahrain-based GFH Financial Group, received AED 78 million at a conversion price of AED 0.32. The bonds, bearing no interest, will be converted into shares after a 14-month lock-up period pending regulatory approval to increase share capital. Eshraq Investments, a key stakeholder in Shuaa, has subscribed AED 50 million to the new bond, signaling strategic investment. The restructuring aims to return Shuaa to profitability and offers exposure to significant upside potential. Additionally, Shuaa GMC manages the Goldilocks Fund, a critical asset for strategic investor Eshraq.

Sectors

Financial Services
Investment Banking

Geography

United Arab Emirates – Shuaa Capital is a Dubai-listed company, and its restructuring activities are primarily based in the United Arab Emirates.
Bahrain – GFH Financial Group, a key participant mentioned in the article, is based in Bahrain, indicating cross-border investment ties in the restructuring process.

Industry

Financial Services – The article revolves around financial restructuring and convertible bonds issued by Shuaa Capital, a financial entity, highlighting activities in the financial services sector.
Investment Banking – Shuaa Capital's issuance of mandatory convertible bonds is a strategic move typical of investment banking practices, aimed at financial restructuring and capital management.

Financials

$97.7 million – The total value of the mandatory convertible bonds issued by Shuaa Capital.
AED 359 million – The equivalent amount in AED of the mandatory convertible bonds issued.
AED 274 million – The value of the bonds issued to existing noteholders.
AED 85 million – The value of the bonds issued to new investors.
AED 50 million – The value of the investment by Eshraq Investments in the new bonds.
AED 78 million – The value of the MCBs issued to GFH Financial Group.

Participants

Name	Role	Type	Description
Shuaa Capital	Issuer	Company	A Dubai-listed investment bank involved in issuing mandatory convertible bonds as part of its debt restructuring.
GFH Financial Group	Existing Noteholder	Company	A Bahrain-based financial group that invested in the original bond and is now receiving convertible bonds as part of the restructuring.
Eshraq Investments	New Investor	Company	An Abu Dhabi-listed company subscribing to the new investor bond, enhancing its strategic position as a stakeholder in Shuaa Capital.
Al Baher Real Estate	MCB Holder	Company	One of the holders of the mandatory convertible bonds issued by Shuaa Capital.
United Motors & Heavy Equipment	MCB Holder	Company	Another holder of the mandatory convertible bonds issued by Shuaa Capital.
Securities and Commodities Authority (SCA)	Regulatory Authority	Government	The regulatory body from which Shuaa Capital is awaiting approval to increase share capital and convert MCBs into shares.