Banking News
Banking News in Dubai
Dubai Banking Group and SHUAA Capital extend agreements
SHUAA Capital (SHUA.DU) announces today that the Dubai Banking Group, a Dubai Group Company, and SHUAA Capital have agreed that instead of redeeming the convertible notes due to convert on 31 October 2008.
SHUAA will call for a general meeting of its shareholders at which it will present for approval a proposal to extend the tenor of the convertible note for one additional year (with the option to extend for a further year) so that the note will mature on 31 October 2009 (unless extended for a further year), at which time they may be converted into shares on the same terms and conditions as previously agreed.
A proposal will also be presented to shareholders whereby Dubai Banking Group will increase its representation on SHUAA Capital’s Board of Directors going forward, to include a majority of the directors.
Mr. Majid Saif Al Ghurair, Chairman of SHUAA Capital, stated:
‘Faced with questions about the respective rights of the parties to convert the notes into shares, the memorandum has been entered into in the context of the current market circumstances in order to permit further review and consideration of the respective positions and concerns of the parties, while protecting the interests of SHUAA Capital. This will allow the shareholders themselves to determine what is in the best interests of the company, after taking account of various alternatives.’
Mr. Fadel Al Ali, Executive Chairman – Operations of Dubai Holding and Chairman of Dubai Banking Group stated: ‘The new agreement will allow the Dubai Banking Group to play a much bigger role in shaping the strategy of SHUAA Capital’s future and leverage its existing infrastructure and solid franchise. The Dubai Banking Group would like to assure all shareholders of SHUAA Capital of its sincere desire and best intentions to generate enhanced shareholder value.’
As the original terms of the convertible note agreement have not changed, there will be no adjustment to SHUAA’s shareholder’s equity because the convertible bond has already been treated as a component of equity in the company’s financial statements.
