United Arab Emirates

In a related story, Bloomberg News reported that investors in a $1.6 billion-Abraaj Group fund have hired advisory firm Alvarez & Marsal Holdings LLC to help recover money owed by the floundering Middle Eastern private equity firm, people with knowledge of the matter said. The New York-based company will represent Abraaj Private Equity Fund IV’s backers in talks with liquidators as they seek to recover more than $99 million owed by the Dubai-based buyout firm, said the people, asking not to be identified because the information is confidential.
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When the pressure intensified on Abraaj over allegations that it had mishandled investors’ funds, Arif Naqvi, the private equity group’s founder, handed over the reins of the company’s fund business to “drive the necessary operational and governance changes,” the Financial Times reported. The Dubai-based buyout house said the move would “ensure that the firm continues to perform at the highest levels”.
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Veteran fixed-income investor Abdul Kadir Hussain sees unsettling similarities between the 1997 Asian crisis and the present that spell trouble for emerging markets, Bloomberg News reported. Default rates on emerging-market debt will climb next year as the ending of a decade of easy money by central banks hits weaker companies the most, said Hussain, the head of fixed income at Arqaam Capital, a Dubai-based investment bank.
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Holders of $500m defaulted Etihad-linked bonds learnt on a restructuring call on Tuesday that an auction aimed at saving the structured debt yielded a bid of just a fraction of their assets’ value, the Financial Times reported. The fate of $1.2bn bonds at the two special-purpose vehicles tied to Etihad has been in the balance since last summer, after the collapse of Italian airline Alitalia and Germany’s Air Berlin.
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Two United Arab Emirates airlines have held talks with South African Airways about a partnership that it says is needed to revive its business, City Press reported, citing the U.A.E. ambassador to South Africa. Talks between Emirates Airline and SAA, which have been going on for some months, are being facilitated by the U.A.E.’s embassy in Pretoria, the Johannesburg-based newspaper cited Mahash Alhameli as saying, Bloomberg News reported. Etihad Airways has also been holding separate negotiations with SAA, he said.
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In Dubai's posh Jumeirah Beach Residence district, luxury apartment rents are down about 15 percent from a year ago - a sign, some fear, that the wealthy emirate's recipe for economic success is getting stale, the International New York Times reported on a Reuters story. For over two decades, Dubai prospered as one of the world's most international cities, attracting people and capital from across the globe. Nine years ago, it needed a $20 billion bailout from oil-rich Abu Dhabi to escape a debt crisis caused by collapsing property prices.
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Some investors in funds managed by Dubai-based Abraaj want to block the sale of assets to Colony Capital pending a review of Abraaj’s handling of funds, according to a report seen by Reuters, potentially delaying a deal key to the survival of the investment management business. United States-based Colony offered last month to buy the fund management unit that runs Abraaj’s Latin America, Sub Saharan Africa, North Africa and Turkey funds after months of turmoil at Abraaj triggered by a dispute with investors over the use of their money in a $1 billion healthcare fund, Reuters reported.
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A Sharjah court judge on Thursday adjourned the case against Abraaj founder Arif Naqvi for issuing a $48.2m cheque with insufficient funds as talks to settle the debt move ahead, the Financial Times reported. Adjournment until July 11 comes after late night negotiations between representatives for Mr Naqvi and Hamid Jafar, the founder of Crescent Group, who loaned Abraaj $300m last December. The criminal case, which had its first hearing on June 28, relates to one of several cheques signed by Mr Naqvi and a co-defendant and written to Mr Jafar, which were dishonoured when presented.
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Bonds issued by EA Partners, a special purpose vehicle linked to Etihad Airways, fell to the lowest on record this week after the company said it wants to discuss restructuring some of its debt with creditors. EA Partners II’s $500 million of bonds due June 2021 are quoted at a bid price of 63 cents on the dollar, about 5 cents lower since last week, according to two separate brokers contacted by Bloomberg.
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