Al Tamimi & Company, the leading full-service law firm in the MENA region, has advised Islamic Arab Insurance Company (PJSC) (“SALAMA”) on a strategic capital optimization transaction involving the private issuance of AED 155 million in Sharia-compliant Mandatory Convertible Sukuks (“MCS”).
The transaction combines a capital reduction followed by the issuance of MCS through a special purpose vehicle, and an ultimate capital increase simultaneously with the conversion of MCS into shares. The MCS were privately subscribed by professional investors. The transaction was designed to strengthen SALAMA’s solvency position and support its long-term financial stability.
The sukuk structure, developed in accordance with AAOIFI standards and certified by an external Sharia advisor, features a mandatory conversion mechanism enabling Salama to immediately convert and exchange the MCS into equity following issuance. The transaction was executed under the UAE’s private offering framework and included related party participation, requiring enhanced governance and shareholder approvals. All applicable regulatory approvals were also obtained in relation to the capital optimization transaction.
Al Tamimi & Company advised on all legal aspects of the transaction, including structuring, drafting the sukuk documentation, shareholder communications, and regulatory compliance, as well as coordinating with the relevant UAE regulatory authorities.
Andrew Tarbuck, Partner and Head of Corporate at Al Tamimi & Company, commented:
“This transaction highlights the growing sophistication of capital markets solutions in the UAE and the increasing role of Sharia-compliant instruments in capital optimization strategies. We are pleased to have supported SALAMA on this important transaction, which reinforces its financial position and supports its future growth.”
The Al Tamimi & Company team was led by Andrew Tarbuck, Husam Hourani, Rafiq Jaffar, Carla Saliba, Muhammad Mitha, Anand Singh, Haya Al Barqawi and Amna Khan. SHUAA Capital PSC acted as financial advisor.
