Shuaa Capital buys out Stanford Marine Group’s Dh1.13b debt

A consortium led by UAE financial firm Shuaa Capital has bought Dh1.13 billion of debt held by Stanford Marine Group (SMG) as part of its restructuring, the companies said on Sunday.

Dubai-based marine services firm SMG has struggled since the collapse in oil prices in 2015, which led to a dramatic fall in chartering rates and a drying up of projects.

“Since 2019, Shuaa Capital has been working with SMG’s lending syndicate and their advisors to arrive at a buyout deal that met all parties’ objectives. The restructuring strengthens SMG’s liquidity position,” Shuaa and SMG said in a joint statement.

The plan has helped save more than 1,800 jobs and annual exports of close to $20 million worth of vessels, the companies said, adding that the debt buyout has supported banks in exiting a distressed debt situation with a cash recovery.

“Shuaa Capital has managed to pull off a complex restructuring program effectively giving the company a new lease of life,” Elias Nassif, chief executive of SMG said.

The firm’s debt problems stemmed from a $325 million Islamic loan agreed in 2015 provided by a group of banks including Noor Bank - which has since been acquired by Dubai Islamic Bank - Barwa Bank, Ajman Bank, United Arab Bank, Qatar Islamic Bank, and First Gulf Bank - now part of First Abu Dhabi Bank.

Jassim Alseddiqi, CEO of Shuaa Capital, said, “Despite the Covid-19 lockdowns last year, we continued to lead discussions with the SMG lenders’ advisors and worked collaboratively to reflect the changing needs of the consortium while finding a viable solution that worked in the best interest of all parties involved. We are proud to have achieved so much with this deal - from supporting banks to exit a distressed debt situation with a cash recovery, to retaining jobs for over 1,800 employees and sailors and sustaining their livelihoods, and finally ensuring continuity of SMG business and its contribution to the local economy. We believe this to be one of the few restructuring transactions in recent times to successfully address all stakeholder needs and we hope that this will serve as a template for further such transactions.”

This investment is part of the Private Markets activity of Shuaa Capital and is held as a co-investment vehicle. The investment is expected to generate management fee and performance fee income to Shuaa Capital, in addition to the investment return on its principal investment position. — Agencies