A dispute has emerged between Eshraq Investments and Shuaa Capital regarding the accuracy of Shuaa’s disclosure on its mandatory convertible bond (MCB) issuance, according to filings from both companies. Eshraq denies subscribing to AED 50 mn worth of new investor MCBs, while Shuaa maintains that Eshraq made a legally binding and irrevocable commitment.

IN CONTEXT- Shuaa’s board approved issuing AED 85 mn in new investor MCBs and AED 274.5 mn in MCBs to existing noteholders. The new investor issuance included AED 50 mn designated for Eshraq, which, according to Shuaa, had already committed to the subscription.

Eshraq disputes Shuaa’s claim: In an ADX disclosure (pdf), Eshraq rejected a Shuaa statement (pdf) from last week, asserting that it had only recently received a copy of the proposed subscription agreement, which remains under review. The company denied proposing, approving, or signing any final subscription agreement.

Shuaa stands by its disclosure: In response, Shuaa Capital reaffirmed its position, stating in a new DFM filing (pdf) that Eshraq had subscribed to AED 50 mn worth of MCBs via private placement in February. Shuaa maintains that Eshraq’s commitment was formalized through a legally binding undertaking letter, which it disclosed to the market on the same day

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