Air Arabia seeks to protect Abraaj investment

Air Arabia seeks to protect Abraaj investment
Published: 19 June 2018 - 7 a.m.
By: Bernd Debusmann Jr

Air Arabia is taking steps to make sure its investment in funds managed by Abraaj Group is protected in the wake of the private equity company’s filing for court-supervised restructuring last week, the airline said on Monday.

“As part of the Air Arabia Group investment portfolio, the carrier has an investment in Abraaj funds,” said the statement sent to Arabian Business.

“Air Arabia has appointed a team of experts who are actively engaged with all stakeholders and creditors involved with the matter to ensure Air Arabia’s investment and business interest is protected.”

According to Air Arabia’s website, Abraaj founder Arif Naqvi is a board director at the airline.

Air Arabia shares plunged 7.1% in Dubai on Monday to the lowest level in 11 months. The volume of trading in the stock was almost seven times its 30-day average.

Independent audit

Also on Monday, the Financial Times newspaper reported that one of Abraaj’s creditors, Auctus Fund, has called on Abraaj to accept Grant Thornton in the role of independent provisional liquidator to carry out a full audit ahead of a hearing in the Cayman Islands.

When it filed for provisional liquidation last week, Abraaj requested that the Cayman Islands court appoint PwC as provisional liquidator.

“This is a question of who controls the process and the independence of the liquidator,” the newspaper quoted an unidentified person aware of Auctus’s position.

Auctus Fund holds a debt originally made by Crescent Group found Hamir Jafar, who made the short-term loan in December before Abraaj defaulted in February.

Jafar has since transferred the $100 million unsecured debt to Auctus, which claims that mismanagement at Abraaj has prompted the need for an independent liquidator.

In a statement sent to the FT, Abraaj said that “It is unfortunate that we have reached a stage where parties to proceedings and/or their advisers appear to be sharing privileged communications to the media.

“It is absolutely clear to us that whoever is appointed by the court will naturally require the full co-operation of the group’s management and be wholly accountable to the court in working for the benefit of all creditors,” the statement added.

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