Raft of UAE companies reveal exposure to Abraaj Group

Founder and Group Chief Executive of the Abraaj Group Arif Naqvi from Pakistan gives a speech during the second day of the World Economic Forum Meeting on Africa, at the Cape Town International Convention Centre on May 9, 2013. (AFP File Photo/RODGER BOSCH)

LONDON: Several UAE-listed companies and banks have disclosed their level of exposure to Abraaj Group, the private equity firm currently embroiled in a court-managed restructuring, according to a raft of filings posted on the Abu Dhabi exchange (ADX) on Tuesday.
Abraaj won court approval for a provisional liquidation of its business last month. The company began to run into problems following accusations last year from investors, including the Bill & Melinda Gates Foundation, of mismanaging their money in its $1 billion health care fund. Abraaj has denied the allegations.
First Abu Dhabi Bank was among those companies revealing some degree of exposure, confirming on July 10 that it had a $21.4 million fully secured three-year term loan collaterized with Abraaj Holding stakes in its funds invested in various companies globally. The facility is due to mature in April 2019.
United Arab Bank said that while it did not have any direct exposure to the group, it did have indirect exposure through customers represented with two entities that are “partially and indirectly owned by Abraaj.”
Waha Capital said it had not invested in Abraaj Group or its funds. However, it is the ultimate beneficial owner of 49 percent of Aqua Consortium, which holds the Stanford Marine group of companies. The remaining 51 percent of the group is “ultimately held” by Abraaj Group, it said in its filing on Monday.
“Waha Capital has no financial exposure to The Abraaj Group through its shareholding in the Stanford Marine group of companies and foresees no direct financial loss for Waha Capital arising from the Abraaj liquidation process,” the statement said.
Umm Al Qaiwain General Investments, Finance House, Eshraq Properties, Foodco Holding, Rak Properties, RakBank and Al Wathba National Insurance Company were among those companies that filed on Tuesday to confirm that they did not have any exposure to Abraaj Group.
The filings followed the call last month by the UAE regulator — the Securities and Commodities Authority — to ask all UAE-listed companies to reveal the extent of their exposure to the troubled equity firm.
In June, the Dubai-listed low-cost carrier Air Arabia confirmed it had a $336 million exposure to Abraaj through fund portfolios and short-term investments.
In a statement filed to the Dubai Financial Market on June 20, the company said the impact of the issue on its investment portfolio was “limited.”
“We emphasize that there is no significant impact on Air Arabia’s daily or future business or on its liquidity status and that the business is operating as usual,” the statement read.
On 21 June, Abraaj agreed to sell its Latin America, Sub-Saharan Africa, North Africa and Turkey funds management business to US firm Colony Capital as part of a provisional liquidation and restructuring process demanded in a court order.
Abraaj was founded by Arif Naqvi in 2002 and become one of the leading private equity investors involved in markets across the world, from Latin America to South East Asia.