Air Arabia said on Thursday it has begun legal proceedings against Abraaj founder Arif Naqvi in a court in Sharjah, the latest challenge for the founder of the collapsed private equity firm, Reuters reported. Air Arabia disclosed earlier last year it had an overall exposure of $336 million to Dubai-based Abraaj, which filed for provisional liquidation in the Cayman Islands. Air Arabia said in stock exchange filing that it has filed a “misdemeanor” case against Naqvi in Sharjah, one of the seven emirates in the United Arab Emirates (UAE). The filing did not provide more details.
United Arab Emirates
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In a related story, Reuters reported that Etihad Airways has offered to invest in debt-laden Indian carrier Jet Airways Ltd at 150 rupees ($2.11) per share, along with an immediate release of $35 million after certain conditions are met, CNBC-TV18 reported here on Wednesday, citing sources. The offer comes at a staggering 49 percent discount to Jet’s closing price of 293.70 rupees on Tuesday. Jet Airways shares tumbled after the report, falling as much as 7.5 percent to 271.75 rupees in their biggest intraday percentage loss since Dec. 10, 2018.
Cracks are starting to show in the United Arab Emirates’ banking sector as a property and retail slump take its toll on lenders, Bloomberg News reported. One of the country’s smallest banks is being bailed out, problem loans are expected to rise this year and lenders are exploring mergers to stay competitive. Slow property sales, higher interest rates and a rise in lending amid improved economic growth could mean provisions jump as much as a quarter, according to analysts.
Turkish billionaire Ferit Sahenk is in talks to sell some of Europe’s most famous luxury hotels to the investment firm owned by Dubai’s ruler as part of a debt restructuring, people with knowledge of the matter said. The discussions involve properties including the historic Capri Palace in Italy, the Aldrovandi Villa Borghese in Rome and Istanbul’s Grand Hyatt, the people said, asking not to be identified because the talks are private, Bloomberg News reported. Dubai Holding is doing due diligence on the Capri Palace and Aldrovandi, one of the people said.
Etihad Airways scrapped orders for Airbus SE jetliners and revealed plans to cut 50 pilot posts as the Persian Gulf carrier seeks to slim down operations amid mounting losses, Bloomberg News reported. Abu Dhabi-based Etihad canceled the purchase of 10 A320neo single-aisle jets, based on the latest monthly order figures from Airbus, while a letter to staff indicates that the flight-crew jobs, representing about 2.4 percent of pilots, will be eliminated by the end of this month.
Abraaj Group, the private-equity firm that collapsed after defaulting on debt, will get a 70 percent stake in C&I Leasing Plc by converting a $10 million loan into equity in the Nigerian company, Bloomberg News reported. “Abraaj knows that pulling out $10 million will be detrimental to the growth of the business, so rather than cash out, they decided to convert,” C&I Chief Executive Officer Andrew Otike-Odibi said by phone from Lagos. Once done, C&I plans a rights issue or an initial public offering that may dilute Abraaj’s stake to about 30 percent, he said.
Commercial Bank of Dubai (CBD), which lent around $170 million to Abraaj, will take stakes in the troubled private equity firm’s funds which were offered as security against the debt, three sources familiar with the matter said. Dubai-based Abraaj, worth $13.6 billion, was the largest buyout fund in the Middle East and North Africa until it collapsed last year following turmoil triggered by a row with investors, including the Gates Foundation, over the use of their money in a $1 billion healthcare fund, Reuters reported.
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.
The insolvency administrator for bankrupt airline Air Berlin has sued its former largest shareholder, Gulf airline Etihad, for 2 billion euros ($2.26 billion) in damages, a Berlin court said Friday, the Associated Press reported. The suit alleges United Arab Emirates-based Etihad failed to live up to its financial obligations by withdrawing funding from the struggling airline, according to the Berlin administrative court. In a statement, the court said Etihad had been supporting Air Berlin and sent a so-called "comfort letter" in April 2017 assuring its continued backing for 18 months.
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Jet Airways Ltd and second-largest shareholder Etihad Airways have been holding rescue talks with bankers of the indebted Indian carrier, three people aware of the matter told Reuters on Wednesday. Executives of the airlines met State Bank of India officials in recent days to discuss Jet's cash flow and business plan, two of the people said, the International New York Times reported on a Reuters story. One said Jet has outstanding dues of about $400 million (314.29 million pounds), mainly owed to lessors and vendors.