Eshraq Investments will invest AED50 million ($13.61 million) in SHUAA Capital’s Mandatory Convertible Bonds (MCBs) offering.
Eshraq announced this in a filing with the Abu Dhabi Securities Exchange (ADX) after its Board of Directors approved the investment following the completion of an independent advisor’s analysis. It is the first of several steps Eshraq intends to take to support its strategy to optimise the structure of its investment holdings.
Eshraq invests in SHUAA
The Board believes the decision has significant strategic advantages for Eshraq and its shareholders. Following the conversion of the bonds into shares, Eshraq would become a shareholder in SHUAA. It would position the company to advance its strategic objectives, including the redemption of key assets managed by SHUAA, thereby safeguarding and enhancing long-term value for shareholders.
The conversion of the MCBs into shares will be immediate once SHUAA secures regulatory approvals.
As SHUAA is a shareholder in Eshraq, this is considered a related-party transaction, and it falls within the Board’s approval authorities. The Board of Directors believes the terms of the transaction fair to both parties and does not contain any unusual or preferential conditions.
Last year, Eshraq Investments said it was shifting the focus of its core business and transitioning to a directly held Private Equity focused model after previously focusing on Real Estate and Financial Investments.
Fahad Al Qassim, Chairman of Eshraq, had commented: “We are pleased to unveil Eshraq’s long-term strategy for growth and shareholder value creation, through which we intend to become a leading GCC investment company focused on direct Private Equity exposure, with a portfolio that is complemented by investments in income-generating assets.
“On the successful execution of our strategy, we expect our investment proposition will be characterised by a well-diversified portfolio in growing sectors across the GCC, enabled by a strong balance sheet that offers significant headroom to invest in new and existing assets, driven by a highly experienced Board.”
Eshraq was founded in 2006 and was listed on the ADX in 2011.
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