UAE - Abraaj Group told creditors the sale of a stake in its fund-management unit and its Pakistani utility will help resolve potential liquidity issues, according to people with knowledge of the matter, Bloomberg reported.
The Dubai-based firm, shaken by allegations of misused funds met with a number of banks last week, including Societe Generale SA and Mashreqbank, where Abraaj told lenders it’s close to finding a buyer for the asset-management stake and will soon complete the disposal of its holding in K-Electric Ltd., they said. The company has been in talks to sell K-Electric since 2016.
Bloomberg reported that Abraaj raised a loan from Mashreqbank and pledged the proceeds from the K-Electric sale, though Abraaj declined to comment, while Societe Generale and Mashreqbank didn’t immediately respond to requests for comment.
One of the Middles East’s largest buyout firms, Abraaj is making an effort to reassure banks and investors following allegations that it misused funds from clients which include the Bill & Melinda Gates Foundation and the World Bank.
The company has undergone a restructure with Founder Arif Naqvi ceding control of the fund-management unit and there are plans to introduce new internal controls; it has also cut about 15 per cent of its total workforce.
Abraaj is said to be in talks to sell a majority stake in its asset-management unit to Colony NorthStar Inc. in a bid to raise cash amid heightened scrutiny and to help stabilise the business, people said in March, since Abraaj’s cash position has been eroded as one of its largest-ever exits, the proposed sale of a 66.4 per cent stake in K-Electric, is yet to be completed. The company had agreed to sell the asset to Shanghai Electric Power Co. for $1.77 billion in October 2016, but the deal has been held up due to negotiations over electricity tariffs with the government, according to people aware of the matter, Bloomberg said.
© 2018 CPI Financial. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).