Dubai Holding LLC, the investment firm owned by the emirate’s ruler, agreed to acquire a minority stake in the operator of Zara clothing and Virgin Megastore chains in the Middle East, according to people with the matter. The stake purchase in Beirut-based Azadea Group values the business at more than $1 billion, the people said, asking not to be identified as the matter is private, Bloomberg News reported. The two parties reached an initial agreement on the transaction last week, the people said.
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Dubai’s Arabtec Holding has hired New York-based investment bank Moelis & Co to work on a new debt-restructuring plan for the construction company, three sources told Reuters. The move comes little more than a year after Arabtec raised 1.5 billion dirhams ($408.4 million) in a rights issue to wipe out accumulated losses and separately asked banks to waive terms on its debt, Reuters reported.
In January, the Abraaj Group had $14 billion of assets under management and was trying to raise $6 billion for what would be the world’s largest emerging-markets private-equity fund. It’s now the world’s largest insolvent private-equity firm. In June, it filed for provisional liquidation. During its rise, the Dubai-based firm attracted many Western investors. Its founder, Arif Naqvi, promised to make money by doing good in poorer countries, including with a fund that would invest in hospitals serving African and Asian cities, The Wall Street Journal reported.
Etihad Airways and Abu Dhabi's Department of Finance are likely to reject calls for a meeting with disgruntled bond investors in the belief that their complaints have no legal merit, sources close to the matter told Reuters. In 2015 and 2016 Etihad issued $1.2 billion in bonds in a partnership with airlines it partly owned at the time, including Alitalia and Air Berlin, the International New York Times reported on a Reuters story. The bonds are now in default because the European airlines, which are now insolvent, have not honoured their part of the obligations.
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A group of creditors to entities set up to finance affiliates of Etihad Airways said in a letter to the airline they were misled on its commitments to support part-owned carriers, two of which are now insolvent, a person familiar with the matter said. The investors say they bought bonds issued by EA Partners between 2015 and 2016 after Etihad implied it would back the affiliates including struggling carriers Alitalia and Air Berlin, according to the person, who asked not to be identified because it’s private, Bloomberg News reported.
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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.
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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.
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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.
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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.
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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.
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