DBG, Shuaa finally settle bond dispute

Dubai Banking Group (DBG) and Shuaa Capital settled a long-running bond dispute with DBG taking a 48.4 percent stake in the investment bank, Shuaa said on Thursday, in a move likely to ease investor concerns.

The deal, which follows months of negotiations and a threat by DBG to take Shuaa to court, will give DBG 515 million shares in Shuaa, more than twice the number of shares agreed to in the original convertible bond deal from 2007, Shuaa said.

The dispute had threatened to tarnish Dubai's image as a financial centre, pressured Shuaa shares down by over a third from a recent peak and triggered a cut in its credit ratings as the spectre of a drawn-out court battle with uncertain consequences for the bank weighed.