Mubasher: Investors in the Abraaj Group’s African subsidiary, Abraaj Africa Fund III, are weighing up appointing new manager that may constitute a new hurdle ahead the sale process for the embattled firm’s asset management unit.
“Investors in the $990 million Abraaj Africa Fund III want to replace the Dubai-based company and have reached out to potential investors including Carlyle Group and London-based private equity investor Actis,” according to Bloomberg News.
Discussions are at an early stage and it is unclear whether any of the buyout firms are interested, people familiar with the matter said.
“Abraaj filed for a court-supervised restructuring last month after it emerged that investors had commissioned an audit to look into alleged mismanagement of money in its health-care fund,” the news agency added.
The Emirati private equity company has been facing allegations of money misuse in its $1 billion healthcare fund. In June, the Dubai-based investment firm filed for bankruptcy. It is reportedly undergoing a mega-restructuring plan.
Several companies, particularly those listed in the UAE, have disclosed their exposure to Abraaj as per a circular issued by the Securities and Commodities Authority (SCA).
Such companies included Air Arabia’s AED 1.2 billion exposure, Al Qudra Investments, and Commercial Bank of Dubai (CBD).
In a related note, PricewaterhouseCoopers' (PwC) report revealed that Abraaj Holdings’ business model is unusually reliant on short-term loans.
Substantial financial statements of the ailing private equity firm are missing, while others were not even prepared, the report found.
Analysts previously told Mubasher that companies’ disclosures of the level of their exposure to Abraaj would boost investor confidence in the markets.
