Abraaj ‘fil­ing’ asks for pro­vi­sional liq­ui­da­tion

Arab Times - - FRONT PAGE -

DUBAI, June 14, (RTRS): Abraaj, the Mid­dle East’s big­gest pri­vate eq­uity firm, has filed a pe­ti­tion in the Cay­man Is­lands, ask­ing the court to ap­point PwC as pro­vi­sional liq­uida­tors for the em­bat­tled com­pany.

“The ap­point­ment of pro­vi­sional liq­uida­tors im­poses a mora­to­rium on the en­force­ment of all un­se­cured claims against the com­pany, al­low­ing time for a pro­posal to be put to cred­i­tors for the or­derly re­struc­tur­ing of the com­pany,” it said in a state­ment.

The move is to thwart sep­a­rate le­gal ac­tion by the Kuwait Pub­lic In­sti­tu­tion for So­cial Se­cu­rity (PIFSS) and another cred­i­tor, who are seek­ing the liq­ui­da­tion and wind­ing up of Abraaj for non-pay­ment of debt.

Dubai-based Abraaj has been try­ing to stem the fallout from a row with four of its investors, in­clud­ing the Bill & Melinda Gates Foun­da­tion and In­ter­na­tional Fi­nance Corp (IFC), over how it used their money in a $1 bil­lion health­care fund. Abraaj has de­nied it mis­used the funds. Abraaj’s founder Arif Naqvi founded Abraaj with $60 mil­lion in 2002 and built it into an emerg­ing mar­ket cham­pion with as­sets of $13.6 bil­lion at its peak be­fore the row forced the firm to sus­pend a new fund and shakeup its man­age­ment.

A court-ap­pointed pro­vi­sional liq­uida­tor helps safe­guard the as­sets of the com­pany un­til a wind-up ap­pli­ca­tion is heard by the court.

Naqvi said in a state­ment this process marks the cul­mi­na­tion of an ex­tremely com­plex and chal­leng­ing phase of ne­go­ti­a­tions and de­tailed plan­ning.

“Since our dif­fer­ences with cer­tain investors first came to light, we have worked ex­haus­tively and trans­par­ently to in­ves­ti­gate the mat­ter and ad­dress their con­cerns, all the while en­sur­ing our tremen­dous in­vest­ment teams around the world con­tinue to sup­port the growth of our part­ner com­pa­nies,” he said.

Abraaj, with debts es­ti­mated at over $1 bil­lion, met its cred­i­tors ear­lier this month to reach a stand­still deal, which the firm said was backed by the vast ma­jor­ity of its lenders, to fa­cil­i­tate the sale of its in­vest­ment man­age­ment busi­ness to Cer­berus.

How­ever the Kuwaiti fund, an un­se­cured cred­i­tor, re­fused to join se­cured cred­i­tors in the pro­posed debt freeze agree­ment.

In another le­gal chal­lenge to Abraaj, a lit­tle known cred­i­tor of Abraaj also started le­gal pro­ceed­ings in the Cay­man Is­lands seek­ing the re­struc­tur­ing of the pri­vate eq­uity firm’s li­a­bil­i­ties.

Allen & Overy LLP, Carey Olsen and Mil­bank, Tweed, Hadley & McCloy LLP are serv­ing as le­gal ad­vi­sors and Houli­han Lokey are serv­ing as fi­nan­cial ad­vi­sors to Abraaj 333Hold­ings.

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