Dubai Group Said to Hire Emirates NBD for Shuaa Stake Sale

  • Company's 48% stake in Shuaa is worth about $100 million
  • Shuaa Capital's shares soared 68 percent so far this year

Dubai Group LLC, an investment company owned by the sheikhdom’s ruler, hired Emirates NBD PJSC to help find a buyer for its stake in investment bank Shuaa Capital PSC, according to two people familiar with the matter.

The sale process is at an early stage and may not result in a deal, said the people, asking not to be identified because the talks are private. Dubai Group holds a 48 percent stake in Shuaa worth about $100 million, according to data compiled by Bloomberg. Dubai Group, Emirate NBD and Shuaa all declined to comment.

Trading volumes in Shuaa have been soaring in recent weeks amid signs that an investor may be seeking to gain a foothold in the company. The investment firm, whose shares have lost about two-thirds of their value in the past two years, had four chief executive officers in about five years and managed without one since the end of 2013. The stock fell 2.4 percent to 67 fils as of 10:55am in Dubai and has gained about 64 percent this year.

Shuaa in February said it posted a 190 million-dirham ($51,728) loss last year, the worst performance since 2011. Most of these losses were attributable to Gulf Finance, the SME lending business, it said.

Dubai Group, controlled by Dubai Holding LLC, was one of several companies in the emirate that were forced to restructure loans arranged before property prices slumped and credit markets froze after the 2008 global credit crisis. The company reached a final agreement with lenders to restructure $6 billion in debt in 2014 after three years of talks.

Dubai Group also owns stakes in Oman’s biggest lender Bank Muscat SAOG and in Egyptian investment bank EFG-Hermes, according to its website.

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