An initiative has been launched to support small and medium enterprises in the technology sector
"Shuaa Capital" adopts diversity and speed of keeping pace with changes to confront "Corona"
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"Shuaa Capital" confirmed that the diversification policies and the speed of keeping pace with the changes were among the most prominent mechanisms it adopted, to confront the repercussions of the emerging corona virus (Covid 19).
She explained to Emirates Today that the company has kept pace with the efforts of government agencies to confront the effects of the pandemic, by launching an initiative to support small and medium-sized companies operating in the technology sector in the Emirates affected by the pandemic, by providing financial advice free of fees and capital support mechanisms. To provide interest-free loans through partners licensed to provide financial facilities.
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Global crisis
The CEO of "Shuaa Capital", Jasim Al-Siddiqi, said that the economic and financial repercussions of the Coronavirus pandemic have taken the level of the global crisis, and have had a clear impact on the economic and productive sectors, and various activities around the world, not just the financial sector.
He revealed that the company has adopted mechanisms and policies to confront the pandemic, the most prominent of which was the speed of keeping pace with changes, adapting to the crisis, and interacting with its results wisely and positively, while adopting diversity policies.
Corporate support
He added: “The (Corona) crisis has not prevented our perseverance to work, according to a vision based on contributing to the efforts made by the state’s government to support the business sector and redirecting it to sound foundations to restore its previous activity, as we announced an initiative to support small and medium-sized companies operating in the technological sector in the UAE. And affected by the (Covid-19) virus, by providing financial advice free of fees, supporting capital support mechanisms, in addition to providing interest-free loans, through partner agencies authorized to provide these financial facilities.
He stressed that the company, in facing the repercussions of the pandemic, strengthened its specialized financial services, as well as strengthened its activity in the field of corporate restructuring, and helped them increase their capital, through a set of tools that include: blended finance, secondary loans, term loans, and fixed-income tools. , Preferred stocks, and other financial instruments.
Financial solutions
He pointed out that "Shuaa Capital" focused, during the pandemic, on financial solutions that allow companies to obtain new sources of financing, after the pandemic led to a state of stalemate in the credit markets, exposing a number of companies to difficulties and risks in terms of the abundance of liquidity and solvency, In the field of issuing bonds designated for debt amortization, according to which companies obtain additional liquidity that they use to provide the required alignment between repayment terms and the level of their cash flows.
Debt financing
Al-Siddiqi confirmed that "Shuaa Capital" has completed, over the past years, the restructuring of more than four billion dollars in debt financing deals, including about one billion dollars in high-yield alternative financing operations.
He pointed out that, in the midst of the "Covid-19" crisis, "Shuaa Capital" completed the process of managing the issuance of sukuk for the benefit of Gulf Navigation Company, with a volume of 125 million dirhams, indicating that it was the first high-yielding issue in the region since the outbreak of the "Covid-19" crisis. And caused the freeze in global credit markets.
Operational activity
Al-Siddiqi said that the company was able to maintain its operational activity, according to its strategy based on focusing on its main activities in the areas of investment banking and asset management.
He continued: “With the start of the exit of most markets from around the world from the state of forced closure, and the easing of quarantine measures, we expect the acceleration of the pace of business, and the emergence of new opportunities,” stressing the readiness to take advantage of these opportunities, in light of the readiness of the working human cadres and the abundance of the base of products and services The company’s ability to reach major regional and global markets.
He pointed out to the company's management a diversified portfolio of investments distributed over several sectors, including sectors that showed during this crisis a remarkable ability to grow as a result of the nature and diversity of its activities.
Corporate advice
On the advice that can be provided to Emirati companies, based on the experience of the "Corona" crisis, Al-Siddiqi said that companies need to explore all available means and tools to improve their balance sheets and find successful solutions to the problems they face at the level of liquidity.
He continued, "We believe that the return of things to their previous state at the level of regional markets may take a longer time, especially in the field of corporate sector financing, given the record decline in oil prices and the nature of financial markets, which are still less developed than their western counterparts."
He pointed out that restructuring existing debts is one element of restructuring, as there is a constant need for companies to inject new capital.
Added Value
Al-Siddiqi confirmed that Shuaa Capital works according to a strategic vision that reflects the transformations that occurred in the company following its merger with the Abu Dhabi Financial Group. It aims to create added value for the benefit of customers and shareholders by focusing on efficient activities, reducing non-core assets management and strengthening the budget. The company.
He stressed that, despite the challenges and difficult conditions in the markets, "Shuaa Capital" continues to work on reaching new sources of revenue, through: expanding the scope of investment banking services, developing the business of asset management activity, and expanding the regional presence, leading to the strengthening and strengthening of the main business. ; In addition to increasing recurring revenues through engineering new products, developing permanent capital tools, and a fixed income platform, leading to diversification of product and service offerings across its main business units; Increasing profitability, enhancing the process of control and controls, through digitizing the group, improving its balance sheet structure, and increasing its operational efficiency.
A global village ... and two visions of "the crisis"
In a comparison between the Corona pandemic and the financial crisis in 2008, Al-Siddiqi said: The most prominent similarity element lies in the mutual influence between world economies and capital markets, developed as well as emerging ones, according to the concept of the "global village", which globalization has produced, especially with the correlation between The health crisis caused by the pandemic, with the significant drop in oil prices, in addition to the concerns that the pandemic caused in terms of supply chains and food security, in light of the slowdown, and sometimes paralysis, that affected global transport.
He continued: “Against this concept, a statement by the International Crisis Group appeared, in which it drew attention to the emergence of two competing visions: one says that states should cooperate in order to better overcome the crisis, while the other believes that each country should distance itself, in order to protect its people from "The risks coming from abroad, so that isolation versus globalization has become a major issue awaiting resolution."
He added: “At a time when the financial crisis, in 2008, prompted the world's largest economies to search for ways of cooperation, it was remarkable with the beginnings of the (Corona) crisis that Western countries that promoted the logic of globalization and openness turned to closure and isolation, and to take protective steps that reached the point of competition in Piling medical equipment, such as masks. ”
The real estate sector
Al-Siddiqi stressed that, despite the state of anticipation and stagnation that controls the real estate sector, the company is confident in the attractiveness of this sector and its ability to resume growth, according to a new vision based on keeping pace with the emerging needs of customers after the "Covid-19" stage.
Jassim Al-Siddiqi:
"(Shuaa Capital) focused, during (the pandemic), on solutions that would provide companies with new sources of financing."
"Over the past years, we have completed more than four billion dollars of debt financing deals."