Dubai Group to sell Shuaa stake to ADFG for Dh341m

Dubai - Shuaa's stock jumped 5.1 per cent on Wednesday as 33 million shares changed hands

Investment bank Shuaa Capital said on Wednesday that its biggest shareholder had agreed to sell its stake to Abu Dhabi Financial Group (ADFG) in a deal potentially worth Dh341 million.
Dubai Banking Group, a subsidiary of Dubai Group, has reached an agreement with ADFG for the 48.36 per cent stake, Shuaa said in a statement to Dubai Financial Market.
Shuaa's stock jumped 5.1 per cent on Wednesday as 33 million shares changed hands, or more than seven-times the intraday average of the past 20 days.
The stake is worth Dh341 million at Tuesday's closing price. The completion of the sale is subject to regulatory approvals.
Fadel Al Ali, chairman, Dubai Group, said the stake sale is in line with Dubai Group's restructuring agreement. "We have been a proud partner in Shuaa Capital over the years and we are pleased to have found in ADFG a strong, strategic partner to support Shuaa's future development and long-term growth prospects."
Jassim Alseddiqi, chief executive officer, ADFG, said the acquisition of Dubai Banking Group's interest in Shuaa would provide the investment group with a significant stake in one of the Middle East's leading financial services institutions. "As a potential leading shareholder in the company, we would look forward to supporting Shuaa achieve its strategic ambitions in order to deliver long-term value for all stakeholders."
Alseddiqi said the acquisition represents yet another landmark for ADFG, as it continues to seek high-quality investments across a variety of sectors and geographies.
Mustafa Kheriba, chief operating officer, ADFG, said the Abu Dhabi group intends to support Shuaa's future development, and to ensure it delivers value-enhancing services to its clients.
ADFG, which was founded in 2011, is an alternative-investment company primarily focused on financial services and real estate in the GCC, the UK and Eastern Europe.
Through its subsidiaries, ADFG which has assets under management estimated at $3.5 billion, has widespread expertise and experience across its core sectors, which include real estate, debt financing, capital markets and other financial services activities.
In the first half of 2016, ADFG increased its stake in GFH Financial Group, unveiled its plans and achieved planning approval to redevelop New Scotland Yard in London, and announced its intention to launch an Islamic Bank at Abu Dhabi Global Market.
ADFG said once the transaction has completed, it would explore opportunities for synergies with Shuaa across the full spectrum of the company, as well as enhancing Shuaa's deal flow through leveraging ADFG's extensive network.
Dubai Group hired Emirates NBD to help find a buyer, people familiar with the plan said in April, as it strives to meet payment obligations under a debt-restructuring plan.
In 2015, Shuaa posted a Dh190 million loss, its worst performance since 2011. Most of these losses were attributable to Gulf Finance, its small and medium enterprise lending business.
- issacjohn@khaleejtimes.com