Dubai Bank Wins Right to Swap Abraaj Debt for Fund Stakes

Noor Bank PJSC, which provided a $100 million loan to the collapsed Abraaj Group, won the right to swap the debt for stakes in some of the Dubai-based buyout firm’s funds, according to people with knowledge of the matter. Privately-held Noor Bank won approval from a court in the Cayman Islands, where Abraaj is undergoing a supervised restructuring, to take ownership of stakes in the funds that were pledged against the loan, the people said, asking not to be identified because the process is private, Bloomberg News reported. Noor Bank will hold the stakes alongside other investors and limited partners, the people said. The lender may eventually be able to recover more than it lent to Abraaj when the assets in the funds are sold, one of the people said. Abraaj was one of the most high-profile private equity companies in the Middle East until its dramatic collapse last year. The firm owes banks more than $1 billion and is being restructured after it defaulted on loans and 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. Read more