United Arab Emirates

It took almost 16 years to build Abraaj Group into one of the most influential emerging-market investors and the Middle East’s biggest private equity dealmaker, Bloomberg News reported. The Dubai-based firm’s dramatic collapse took just four months. Suitors are now circling the company’s funds as liquidators seek to settle about $1 billion in debt. The problems for the buyout firm and its founder, Arif Naqvi, began in February with allegations that money in the company’s health fund had been misused.

Abraaj, once one of the most influential emerging-market investors, plans to vacate its headquarters in Dubai’s business hub after the embattled buyout firm failed to pay rent, people with the knowledge of the matter said. Dubai International Financial Centre told Abraaj to vacate its main office in the financial freezone by the end of the month, the people said, asking not to be identified as the information is private, Bloomberg News reported. The lease on one of the company’s offices has expired, one of the people said.

The United Arab Emirates’ banking group is considering whether to ask the central bank to relax mortgage lending rules to stimulate a fragile real estate market, sources familiar with the matter said. At the moment, first-time buyers of a home worth up to 5 million dirhams can only borrow up to 80 percent of the property value if they are UAE citizens, while the cap is 75 percent for foreigners, Reuters reported. The UAE Banks Federation’s retail banking committee has proposed that the limit be raised to 85 percent for UAE nationals and 80 percent for foreigners, the sources said.

Dubai’s flagship airline Emirates is looking at taking over unprofitable neighbor Etihad, according to four people familiar with the matter, in a move that would create the world’s biggest carrier by passenger traffic. The talks, which are at a preliminary stage, would see Emirates acquire the main airline business of Abu Dhabi’s Etihad, which would keep its maintenance arm, according to the people, who asked not to be named because the matter is confidential, Bloomberg News reported. The negotiations could yet fall through, they said.

Abu Dhabi Financial Group (ADFG) has submitted a revised bid to acquire the management rights for the Middle East funds of stricken Dubai-based Abraaj, according to a document seen by Reuters. The Abu Dhabi-based alternative investment firm is among more than a dozen bidders seeking to buy the bulk of Abraaj’s private equity funds, Reuters reported. But in a letter to investors in Abraaj Funds, ADFG said that the bid is unlikely to materialize given the “convolution” of the situation. To address this, ADFG is seeking a dedicated budget to conduct a full forensic audit and a litigation budget.

Shareholders of loss-making Dubai construction company Drake & Scull will meet on Sept. 27 to decide whether to dissolve the company, Drake & Scull announced on Wednesday. The company, which posted a second-quarter net loss of 181.1 million dirhams ($49.3 million) compared to a year-earlier loss of 182.7 million dirhams, said it was calling a general assembly under an article of United Arab Emirates company law, Reuters reported. The law requires companies to vote on whether they should continue operating if their accumulated losses have reached half of their issued share capital.

It was a deal that should have provided Abraaj Group with one of its biggest ever paydays. Instead the failure to sell a majority stake in Pakistan’s K-Electric to a Chinese group has all but crippled the Dubai-based private equity group, the Financial Times reported. Had the $1.8bn sale gone through at the end of 2017, its parent, Abraaj Holdings, would have received almost $450m. It didn’t.

Dubai’s economic downturn is starting to weigh on some of the emirate’s biggest state-linked companies, Bloomberg News reported. S&P Global Ratings cut the credit worthiness of Dubai’s utility monopoly and a company that owns properties in Dubai’s financial center. Explaining its decision, S&P said it was concerned that Dubai’s deteriorating “credit conditions” may affect the ability to provide extraordinary support to state-related firms if needed. The move is the latest sign that one of the most diversified economies in the Middle East is coming under pressure.

More than 10 private-equity firms including Canadian real-estate firm Brookfield Asset Management have emerged as contenders to buy some or all of the funds managed by Dubai private-equity firm Abraaj Group, according to an email sent to investors reviewed by The Wall Street Journal. Thomas Barrack’s Colony Capital Inc. has also re-entered the race after an earlier deal to buy four of Abraaj’s funds fell through after failing to secure sufficient investor support…The Wall Street Journal reported. Interested parties have until Sept.

Arif Naqvi, the founder of embattled Dubai-based private-equity firm Abraaj Group, and Crescent Group’s Hamid Jafar reached a settlement in a $217 million bounced-check case, Naqvi’s lawyer said two days after a court sentenced him to prison, Bloomberg News reported. The announcement comes after a court in the United Arab Emirates sentenced Naqvi -- who is outside the country -- and another executive, Rafique Lakhani, to three years in jail and ordered them to pay court expenses, according to court documents seen by Bloomberg. The verdict was issued on Aug. 26, the documents show.