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Wed 15 May 2019 07:02 PM

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Dubai's Shuaa says ADFG merger talks in 'final stages'

Shuaa Capital confirms that it is progressing with a potential merger with Abu Dhabi Financial Group

Dubai's Shuaa says ADFG merger talks in 'final stages'
Shuaa Capital said revenues increased to AED55.4 million in the first quarter of 2019, up from AED33.2 million in the year-earlier period.

Dubai-based Shuaa Capital confirmed on Wednesday that it is progressing with a potential merger with Abu Dhabi Financial Group (ADFG).

A strategic investment structure would allow the combined entity to continue to operate as a publicly listed company, a statement said, adding that talks are in their final stages before regulatory and shareholder approvals will be sought.

Abu Dhabi Financial Group, which together with its controlled entities manages more than $20 billion in assets, is the owner of Shine Investments Commercial Projects. Shine holds 48.4 percent of Shuaa, whose chairman Jassim Alseddiqi is the CEO of Abu Dhabi Financial Group.

The merger update was announced as Shuaa Capital said revenues increased to AED55.4 million in the first quarter of 2019, up from AED33.2 million in the year-earlier period.

However, it also posted a AED 24.9 million net loss for the quarter compared to a profit of AED11.7 million in Q1 2018.

Shuaa attributed the performance to "certain one-off provisions and a change in accounting standards".

Fawad Tariq-Khan, chief executive of Shuaa Capital, said: “The first quarter for Shuaa reflects mixed results of the business. Our core operating businesses of investment banking, capital markets and asset management continued to grow in profitability, while certain one-off provisions and higher financing costs dragged our overall results into a loss.

"That said, our continued growth in our core operations continues our strategy of solidifying our recurring revenue base taking us towards sustained long-term profitability.”

As of March 31, Shuaa said its balance sheet and total assets was AED2.2 billion.

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