Founder of Abraaj steps down from Air Arabia
Arif Naqvi, the founder of embattled private equity firm Abraaj Group, resigned from the board of directors of Air Arabia, the Sharjah low-cost carrier said yesterday.
The airline, which announced the resignation in a statement to the Dubai Financial Market where its shares are traded, did not say when Mr Naqvi resigned or the reason behind his move. Air Arabia said it would nominate a replacement in the coming weeks.
Abraaj, which has filed for provisional liquidation in the Cayman Islands, owns an undisclosed stake in Air Arabia, according to the private equity player’s website. At the height of the Middle East’s aviation boom in 2007 and high oil prices, Abraaj had a 17 per cent stake in the airline.
The carrier’s current top shareholder is Sharjah Asset Management with an 18.53 per cent stake, followed by Al Maha Holding with 9.2 per cent.
In June, Air Arabia said it had a $336 million exposure to funds managed by Abraaj, while affirming there is “no significant impact” on its business or liquidity status. The airline has appointed a team of experts to ensure its rights are being protected during the court-supervised restructuring of Abraaj’s funds.
Mr Naqvi faces a new criminal case over a bounced cheque, complicating ongoing negotiations between him and a creditor to reach an out-of-court settlement over unpaid debts, his lawyer said last month.
The value of the bounced cheque is Dh798m and a hearing has been scheduled in the UAE tomorrow, Habib Al Mulla, executive chairman of Habib Al Mulla Baker Mackenzie, told The National last month.
Air Arabia, the UAE’s only publicly-listed airline, posted a 24 per cent decline in second-quarter net profit as the number of passengers carried and seats filled remained flat.
Net profit in the three months ending June 30 reached Dh120m compared with Dh158m a year earlier despite the “economic pressure” that airlines experienced, driven by lower yield margins, higher fuel prices and seasonality shift in traffic, the carrier said.