July 18, 2019

Abraaj Group investors hire advisers for debt recovery

Investors in a $1.6 billion Abraaj Group fund have hired advisory firm Alvarez & Marsal Holdings to help recover money owed by the Middle Eastern private equity firm, people with knowledge of the matter said.

The New York-based company will represent Abraaj Private Equity Fund IVs backers in talks with liquidators as they seek to recover more than $99 million owed by the Dubai-based buyout firm, said the people, asking not to be identified because the information is confidential.

The stakeholders have formed an investor committee led by Boston-based HarbourVest Partners, two of the people said.

Alvarez will also represent the fund if its elected to a liquidators committee for Abraaj Investment Management, which is the buyout firms asset management business, two of the people said. Representatives for Alvarez and HarbourVest declined to comment.

Court-appointed liquidators Deloitte and PricewaterhouseCoopers are trying to settle more than $1 billion of debt owed by Abraaj, once one of the most influential emerging-market investors until its dramatic collapse this year. The private equity firm is undergoing a court-supervised restructuring after it was found to have borrowed money from some of its own funds to meet operating expenses without investors consent, people with knowledge of the matter have said.

A representative for Deloitte did not respond to requests for comment. PwC declined to comment.

Other large creditors may also join the liquidators committee, the people said. They include Grant Thornton as a representative of Hamid Jafar, who lent Abraaj about $300 million, as well as Dubai lenders Mashreqbank and Noor Bank and discount carrier Air Arabia, they said. Representatives for Grant Thornton, Mashreqbank, Noor Bank and Air Arabia also did not respond to requests for comment.

A court in the Cayman Islands appointed provisional liquidators for the holdings and investment management units of Abraaj in June, months after investors, including the Bill & Melinda Gates Foundation, commissioned an audit to investigate alleged mismanagement of money. Abraaj and its founder Arif Naqvi face cases in the Cayman Islands and the United Arab Emirates for defaulting on loan payments.

The liquidators are also seeking more bidders for the firms fund-management unit after investors rejected earlier offers, people with knowledge of the matter said. Past suitors have included York Capital Management, Cerberus Capital Management, a unit of Abu Dhabi Financial Group and Tom Barracks Colony Capital.

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