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.

Investors in a $1.6 billion-Abraaj Group fund said they are owed at least $300 million by the floundering Middle Eastern private equity firm, according to a letter seen by Bloomberg News. They also ask to remove the company as manager. The estimate of what is owed to Private Equity Fund IV by Abraaj is nearly triple the $94.6 million found after a review by Abraaj’s accounting firm Deloitte LLP in June, Bloomberg News reported. The investors are also seeking to stop paying management fees to Abraaj, citing breach of duties to the fund, according to the letter dated Aug.13.

Dubai’s financial services regulator has stopped Abraaj Capital from taking on new business or moving money to Abraaj Investment Management (AIML), its related entity, as part of an investigation into the group, Reuters reported. “Given the onset of financial difficulties of the wider Abraaj Group, the DFSA has been closely monitoring the activities of its regulated entity ACL,” Dubai Financial Services Authority said in a statement on Thursday.

United Arab Emirates-based energy company Dana Gas reported a 14 percent decrease in second quarter net profit on Tuesday, citing one-off sukuk restructuring costs, Reuters reported. Dana Gas has been at the centre of a long and complex legal dispute with its creditors when last year it halted payments on $700 million in sukuk, or Islamic bonds, saying the instruments had become unlawful in the UAE.