Leading UAE law firm Hadef & Partners were instructed in May 2013 to advise on the restructuring of share capital for Dubai property developer, Deyaar, who announced in February that they would be opening up shares for foreign investment. The reduction of existing share capital was undertaken in order to allow more room for foreign investment and is a pioneering move made by Deyaar as one of the first companies in the region to review and adjust their share ownership in this way.
Bilal Snaineh, Head of Corporate Regulatory & Licensing at Hadef, said, “Deyaar are a longstanding client who sought our help in restructuring their share capital which was locked at 51% UAE nationals and 49% GCC. By offsetting sustained losses and reducing share capital, Deyaar were left with a clean slate to facilitate future distribution of dividends to shareholders. We then advised Deyaar to at the same time remove the foreign shareholding restriction opening up 25% share capital to potential foreign investors. Deyaar’s aim was to restore confidence both for their existing investors and new investors, no matter where they are based. This is a market leading approach and they were proved right when, as a result of Deyaar’s announcement in February, they experienced a share price jump of 9.8%.”
On Thursday 6 April 2014, the shareholders of Deyaar approved the allocation of 25% of its share capital to foreign investors which also resulted in the further 2 point increase of its share price.
Bilal added, “We anticipated this very positive market reaction but this move is equally important for the UAE stock market as a whole. As more entities undertake this sort of restructuring it will help to shift the UAE from a frontier index to an emerging markets index and will provide another boost to the economy, particularly with the upcoming emerging market review in May. This is a highly opportune time for investors and the region as a whole, particularly with Expo 2020 not too far away.”
Hadef & Partners are a long established UAE law firm with a renowned reputation for deep local knowledge and international standards of expertise and client service. This instruction was brought about following extensive work that the firm has previously undertaken for the developer in areas of real estate and disputes.
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