Shuaa Capital to get Dh1.67b from DBG

Dubai: The Dubai Banking Group (DBG) yesterday signed an agreement with Shuaa Capital to offer Shuaa Dh1.67 billion in finance, which will eventually be converted into 32 per cent equity.

"Our board decided to raise funds through convertible bonds last month. We see the Dubai Banking Group as a natural partner as they are already in the banking business. We will work closely with the Dubai Banking Group," said Iyad Duwaji, CEO of Shuaa Capital.

Upon maturity of the bonds in October 2008, Dubai Banking Group will receive 250 million shares of Shuaa Capital representing a 32 per cent stake in the company, making it the single largest shareholder of Shuaa Capital. The convertible bonds carry six per cent interest.

The Dubai Banking Group is a private joint-stock company owned 70 per cent by Dubai Holding and 30 per cent by Emaar.

"We look forward to becoming a major institutional shareholder but have no plans to change Shuaa Capital's current strategy or focus," said Abdul Aziz Al Muhairi, managing director of Dubai Banking Group.

Duwaji said the company has already made plans to deploy the new capital for acquisitions in the region.

"We believe this step will help us realise our aspirations, penetrate regional markets and solidify our leading position in the GCC going forward," said Majid Saif Al Ghurair, chairman of Shuaa Capital.