Shuaa Capital is set to issue AED 267.1 mn in mandatory convertible bonds to existing noteholders as an indicative outcome of the exchange offer given for its USD 150 mn notes due on 31 March, according to a DFM disclosure (pdf). The company has accepted the exchange of USD 72.7 mn in existing notes for MCBs out of the USD 76.1 mn in valid tenders received. This accepted amount is subject to pro-rata scaling, with an indicative pro-ration factor of 99%.

REMEMBER- Shuaa initially extended the offer to noteholders of its USD 150 mn bonds, allowing them to exchange up to USD 75 mn in principal for AED-denominated MCBs, with settlement scheduled for 18 March. The offer remains subject to approval from the Securities and Commodities Authority (SCA). This follows a prior agreement with bondholders in April 2024, enabling them to partially convert their holdings into equity, with the remaining debt to be settled at a markdown by 31 March 2025.

What’s next? The indicative, non-binding results will be finalized after the issuer assesses them against multiple criteria, including the validity of submitted exchange details. The final results will be issued once all approval conditions are satisfied.

This is the second tranche of the AED 425.5 mn MCBs the company approved on 17 February. The company previously secured binding commitments from institutional investors for the first tranche, valued at up to AED 150 mn, convertible into shares at AED 0.32 per share. Shuaa had earlier announced plans to issue a total of AED 642.5 mn in MCBs as part of its broader capital optimization strategy.

This is all part of Shuaa’s ongoing restructuring plan, which includes appointing a new management team, settling approximately AED 500 mn in margin facilities, and the restructuring of AED 208 mn in outstanding obligations with its senior creditor. Additionally, it secured a USD 300 mn seven-year facility from the National Bank of Fujairah and the Arab Energy Fund in January.

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