Abraaj restructuring is on track
dubai — The management of Dubaibased private equity firm Abraaj Group on Monday held a meeting with creditors and shareholders to update them about the restructuring of the company and the sale of its fund management business.
The embattled company said in a statement that the stakeholders were informed about the progress of discussions with potential buyers of Abraaj Investment Management Limited (AIML), ongoing transactions and other matters that have been the subject of considerable media speculation.
Abraaj founder and Group CEO Arif Naqvi, co-CEOs of AIML Omar Lodhi and Selcuk Yorgancioglu attended the meeting to provide details. The region’s largest fund manager has been facing concerns about its viability about impending loan repayments and allegations of misuse of funds. Founded in 2002 by Arif Naqvi, the company has shaken up its management, suspended new investments and freed up large investors from millions of dollars in capital commitments after deciding to suspend in a planned $6 billion new fund. The company was reportedly managing $13.6 billion before it decided to return money to its investors in its new fund.
The Group is being advised by Houlihan Lokey on the restructuring of the group and the sale of the key fund managing unit.
Since the issue of alleged mismanagement of money of $1 billion healthcare fund came on the surface, the company is under strict scrutiny and the preliminary findings of a review by Deloitte revealed potential discrepancies in the accounting at some of the its other pools, media reports said.
Meanwhile, Kuwait’s Public Institution for Social Security reportedly said that the fund manager was not able to repay its $107 million loan and interest under the agreed date of June 3.
Analysts believe that the meeting is critical after Kuwaiti fund’s petition to liquidate the group.
Sources told Bloomberg that Colony NorthStar ended talks with Abraaj to acquire majority stake in the AIML after its due diligence efforts raised concerns about the firm. However, another company Cerberus Capital Management is reportedly still in talks for acquiring the stake and is conducting its due diligence.