SHUUA Capital to Issue Two MCBs in Early 2025

SHUAA Capital, an asset management and investment banking platform based in Dubai, on Thursday said that the company’s board has approved the issuances of two Mandatory Convertible Bonds (MCBs) to boost its balance sheet.

SHUUA Capital has announced in April 2024 that it has reached an agreement with bondholders to amend the terms to support reducing the company’s leverage materially by more than $150 million.

“The company intends to complete this process in the first quarter of 2025, subject to market conditions and pending the necessary regulatory and shareholder approvals, and will announce any major developments to the market in due course,” SHUAA Capital informed Dubai Financial Market (DFM), where its shares are traded, in a regulatory filing.

It may be recalled that SHUUA Capital had earlier announced plans to offer MCBs in two tranches at a value of up to $100 million and 75.01 million. The smaller tranche will be offered to existing holders of the outstanding bonds issued by a SHUUA-affiliated special purpose vehicle (SPV).

The company also said that it continued its trajectory towards sustainable profitability, reporting a narrower net loss attributable to shareholders of the company of $5.99 million in the third quarter of 2024, compared with $8.03 million in the previous quarter of this year.

During the course of the year, SHUAA continued its balance sheet optimisation efforts, including valuation adjustments related to underlying assets of an associate and impairments of legacy investments in the UK.

The company’s management has viewed these impairments as a necessary step as the company undertakes a major business transformation to optimise its capital structure.

The company is now better positioned for business growth, leaving its challenging past behind as it charts a path forward. SHUAA aims to increase Assets under Management (AuM), secure new mandates and strengthen engagement with both existing and new clients as well as its creditors.

SHUUA Capital Group CEO Wafik Ben Mansour said that he was satisfied with the progress made by the company this year, despite facing challenging conditions.

“Our capital optimisation plan, which is now in its final stages, combined with our strategic initiatives, will help strengthening SHUAA’s financial foundation and position the company for future growth. As we deepen relationships with clients and attract top talents, I am confident that SHUAA is poised for a new phase of sustainable growth and enhanced market leadership,” he added.

Key Financials

SHUUA Capital’s adjusted Operating Revenues reached $18.79 million for year-to-date (y-t-d) 2024, mainly driven by recurring fees from the Asset Management segment. The adjusted net operating loss of $2.18 million loss for y-t-d 2024, was driven by temporary reduction in revenues as the company undergoes major business transformation, partly offset by cost optimisation measures.

The company’s net loss attributable to shareholders was $37.30 million for y-t-d 2024 was primarily due to noncash impairments related to company’s associate and investment in legacy assets, SHUUA Capital said.

The cost to income ratio of 111% y-t-d 2024, reflecting the temporary reduction in revenues, was partly offset by cost optimisation measures undertaken in 2023 and sustained through 2024.