Shuaa Capital is asking bondholders to restructure some USD 150 mn in outstanding bonds owed by a special purpose vehicle it owns, saying in a DFM filing (pdf) that the “amended terms and conditions” have already been agreed by 25% of bondholders.

Why this matters: The bonds are due on 31 March. The investment bank’s board said yesterday that it was asking bondholders to allow it to stretch payment terms as part of a wider restructuring that it says is a checkpoint on the road to a “capital injection that will restore business stability and continuity.”

Reading between the lines: It seems bondholders are being asked to convert at least some of their debt holding into equity in Shuaa. “The proposal also offers the best available option to noteholders by offering cash settlement and the opportunity to participate in the equity of the company.” The statement doesn’t make clear the specifics of what Shuaa is offering bondholders.

Shuaa said in its 3Q earnings presentation (pdf) that this was coming: 93% of bondholders had agreed at the time to extend the maturity of the USD 150 bn bond until the end of 1Q 2024. Shuaa is looking to then go forward with a “capital reduction and rights issue” to increase its capital.

The company expects to wrap up the restructuring process by June as it repositions itself to focus on asset management and investment banking, it said as it released its preliminary FY 2023 results.

Refresher: Shuaa approved the bonds back in October 2020 (pdf), priced at a coupon of 7.5% and listed on the London Stock Exchange’s International Securities Market.

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