Consultant to clear up UAE Exchange debt mess
Alvarez & Marsal will help sort out operational and debt problems at UAE remittance house
Abu Dhabi: The UAE central bank has hired an adviser to help sort out debt and operational issues at UAE Exchange Centre, according to people with knowledge of the matter.
Alvarez & Marsal Holdings is advising the central bank on the management of UAE Exchange.
The regulator last month took the rare step of assuming control over the firm’s operations in the country as its London-listed parent company, Finablr Plc, prepares for potential insolvency. UAE Exchange plays a key role, as it’s the biggest money-transfer business in an economy hosting millions of expatriate workers who send their salaries back home. It has branches across popular malls and business centers and is one of the largest employers in the United Arab Emirates with thousands of staff.
The company, set up by embattled Indian entrepreneur B.R. Shetty, has defaulted on about $300 million of foreign-exchange loans, people with knowledge of the matter said. Lenders that arranged the facility - including Barclays Plc, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Commercial Bank of Dubai PSC - haven’t been repaid due the mounting problems surrounding Finablr, the people said.
Exposures
Finablr has warned that its board couldn’t accurately assess its financial situation and its CEO has stepped down. While Alvarez & Marsal’s role is currently focused on Abu Dhabi-based UAE Exchange, it could later be expanded.
The central bank regulates UAE Exchange’s currency exchange and remittance operations. It also supervises the nation’s commercial lenders, several of which have been caught up in the growing scandal surrounding Finablr and another company started by Shetty, NMC Health Plc.
Abu Dhabi Commercial Bank said in a statement Wednesday that it has about $981 million of exposure to NMC. Those liabilities are equal to about 82 per cent of its projected profit this year. Abu Dhabi Commercial Bank, currently seen as one of the hospital operator’s biggest creditors, hired Lazard Ltd. to advise on its exposure to NMC and Finablr.
Finablr had a market of 77 million pounds ($95 million) when it was halted from trading in March, down from a peak of 1.5 billion pounds in December. Its stock has been hit after NMC was targeted by short seller Muddy Waters and later found evidence of suspected fraud.