Dubai – Mubasher: DXB Entertainments said that its board approved entering into an AED 1.2 billion convertible instrument with its majority shareholder, Meraas, subject to regulatory and shareholder approval.

"The existing AED 700 million subordinated facility will be rolled forward into the convertible," DXB said in a statement to the Dubai Financial Market (DFM).

The agreement is subject to the approval by the Securities and Commodities Authority (SCA) and the general meeting.

The key terms of the deal are represented in convertible bonds worth AED 1.2 billion, in addition to accrued interest, the Dubai-based leisure and entertainment company highlighted.

The terms also cover coupon rate by 8% per annum (noncash), compounded quarterly due at maturity.

Additionally, bondholders will have the right to subscribe for the principal amount in up to three tranches over a six-month period after the initial issuance date.

The terms also include the strike price estimated at AED 1.04 per share, the statement noted, adding that tenor and maturity are eligible from the date of issuance, to be announced following the SCA approval, and maturing on 30 June 2026.

Conversion period will take place between the period starting 1 January 2021 and ending 31 December 2024.

However, the volume weighted average price (VWAP) for the fiscal year 2024 should be less than AED 1.04 per share, on which the period will be extended until 31 December 2025, the statement said.

Furthermore, if the VWAP for FY2025 is less than AED 1.04 a share, the period will be further extended until 30 June 2026.

It is worth mentioning that DXB, which is 52%-owned by Meraas, had widened its losses to AED 1.116 billion in 2017 from AED 484.8 million in 2016.