SHUAA shareholders mull closure

Shareholders will vote today on the Dubai-based bank's fate; last month, they unanimously opted to keep the company a going concern.

Shareholders of investment bank SHUAA Capital will vote whether “to continue or dissolve the company” at its extraordinary general meeting today, according to an invitation for the meeting.  

SHUAA Partners, the bank’s private equity wing, held a $240 million first close on SHUAA Saudi Hospitality Fund I in August 2008. The Shariah-compliant fund is targeting a final close on $534 million.

This March, shareholders had “unanimously approved a motion to continue with the company” during the bank’s annual general assembly. However, stock exchange regulator Dubai Financial Market requested another vote “in accordance with UAE legal provisions”, according to a SHUAA Capital statement.

Shareholders will also vote on whether to authorize the bank’s board to renegotiate and amend the terms of its AED1.5 billion ($408 million; €308 million) in convertible notes. 

In January, SHUAA Capital de-listed from the Kuwait Stock Exchange to avoid regulatory conflicts from a dual listing. The move also aims to increase its liquidity and trading volume by remaining traded only in Dubai.

In December 2008, the bank said it laid off 9 percent of its workforce in the emirates, citing “overcapacity” in light of the credit crunch.

Last year, SHUAA Capital shares suffered a decline of 85 percent, from AED6.50 per share at the end of 2007, to AED1 per share at the end of 2008.