Dubai: Shuaa Capital posted a loss for the first nine months of 2023, as the asset management and investment banking platform plans to consolidate its balance sheet amid a one-time non-cash impairment charge.
With a reported net loss of Dh570 million due to a one-off, non-cash impairment charge related to legacy assets, Shuaa also posted a 52 per cent rise in operating revenue reaching Dh128 million in the period, compared to the same period last year.
The company said its primary focus in the third quarter of 2023 has been "addressing legacy issues and completing its previously announced capital optimisation process to strengthen the balance sheet through a capital reduction and subsequent capital increase via a rights issuance."
Plans to 'optimise' capital
Shuaa recently completed a step in its capital optimisation plan with noteholders approving extending the maturity of a $150 million group-owned special purpose vehicle bond. Subject to regulatory approvals, it intends to convene a shareholders’ general assembly to initiate a capital reduction and a capital increase.
The repayment and conversion of outstanding bonds through rights issuance proceeds will potentially reduce finance costs of over Dh40 million annually, the company added. "As part of the capital optimisation process, Shuaa is currently engaged in discussions with its creditors and the regulator to secure the necessary approvals to proceed to the next stage.
"The delay in releasing its financial results is due to a pending temporary covenant waiver, and negotiations are ongoing with the senior creditor. The board and management have consulted the regulator and opted to release the financial statements to progress towards the capital optimisation plan, which will improve the Company’s financial position significantly."