Cayman Islands court approves Abraaj’s request for liquidation

The Grand Court of the Cayman Islands has approved the request for a provisional liquidation by embattled Abraaj. This announcement was made known by the Group, days after the company filed an application for provisional liquidation.  

“This order validates the position consistently maintained by Abraaj that an orderly restructuring, under the guidance of a highly experienced team of joint provisional liquidators, can ensure the outcomes we seek for the company and its creditors,” said Arif Naqvi, founder and chief executive of the the company.

According to a United Arab Emirate’s news platform the National Business, the Grand Court of the Cayman Islands appointed Simon Conway of PwC Corporate Finance and Recovery (Cayman) and Michael Jervis and Mohammed Farzadi of PricewaterhouseCoopers, as joint provisional liquidators (JPLs) of Abraaj Holdings, during a hearing on Monday, Abraaj said in a statement. The court also approved a request by Abraaj Investment Management (AIM) for a court-supervised restructuring of Abraaj’s fund management business and appointed David Soden and Stuart Sybersma of Deloitte as JPLs.

This move is to prevent several pending legal actions such as the one by the Kuwait Public Institution for Social Security (PIFSS) and other creditors, who are seeking the liquidation and winding up of Abraaj for non-payment of debt. Financial Times reported that  Arif said he filed for provisional liquidation to maximise recovery for all involved, saying he knew of no intentional wrongdoing.

Reuters, however, reported on Tuesday 19 June that a unit of Abu Dhabi Financial Group (ADFG) has made a conditional offer to buy private equity firm Abraaj’s investment management business for $50 million. This offer is below the $125 million offered by New York-based private equity firm Cerberus Capital Management. Currently, the company has an estimated debt of $1 billion and so far only two companies Colony Northstar Inc and Cerebrus Capital indicated interest in the company. But on Monday Bloomberg reported that Colony Northstar had withdrawn its interest in acquiring Abraaj.

The UAE company and major investor in Africa has been in the news after four of its investors, including the Bill & Melinda Gates Foundation and International Finance Corp (IFC), hired U.S. advisory firm Ankura Consulting Group to trace what happened to some of the money they invested in a $1 billion health-care fund for developing economies. The investors wanted to know why some of it had not been used for its stated purpose of building hospitals and clinics. The investigation found out irregularities, including the diversion of funds from the investment to unrelated investments.