Dubai: Dubai-based Abraaj Group on Thursday announced that it has reached agreement with New York listed Colony Capital, Inc. for the sale of Abraaj’s Latin America, Sub Saharan Africa, North Africa and Turkey funds management business and the Group’s Limited Partnership (LP) interests in the underlying funds.
Abraaj Holdings, Abraaj Investment Management Limited ( the Group) and Colony Capital, the group’s joint provisional liquidators, PricewaterhouseCoopers and Deloitte, announced this morning that they have reached agreement on the principal terms for the sale and purchase of the Group’s Latin America, Sub Saharan Africa, North Africa and Turkey Funds management business and the Group’s Limited Partnership interests in the underlying Funds. As part of the deal, staff in the eight offices will be transferred to new owner under the deal.
Colony has also agreed to oversee, on an interim basis, other Abraaj group funds that are not being acquired so that the group and all its stakeholders have a comprehensive global solution in place.
The agreement has received in principle regulatory approval and is expected to close upon approval from the Grand Court of the Cayman Islands as well as other customary consents. The transaction is expected to complete by July 1.
Abraaj Holdings Limited on last Tuesday said the Grad Court of Cayman Islands appointed PwC as provisional liquidator of Abraaj Holdings and Deloitte as provisional liquidators of Abraaj Investment Management Ltd.
“The appointment of the joint provisional liquidators and the start of the process of restructuring this business that we operated across diverse markets is a moment of introspection, but also one of satisfaction, knowing that the teams that have been nurtured over the years and the businesses that we were proud to invest in now have a clearly defined future and a good home that will become the custodians of the next phase of this journey,” said Arif Naqvi, Founder of Abraaj Group.
Abraaj had filed a petition in the Cayman Islands last week, asking the court to appoint provisional liquidators for the embattled company. The company filed for a court-supervised restructuring as it faced allegations of comingling of funds and potential fund misuse and litigations on loan defaults. The move came less than five months after some of its investors, including the Bill & Melinda Gates Foundation, commissioned a forensic audit to investigate the alleged mismanagement of money in Abraaj's $ 1 billion healthcare fund.
The company estimated to have more than $13 billion under management is facing legal challenges from investors and creditors that has compounded issues relating to liquidity.
Tom Barrack, Executive Chairman, Colony Capital, Inc. said, “We are delighted to have crafted this comprehensive global solution for Abraaj and its stakeholders and We sincerely hope that this can enable the process of rebuilding on all sides and also bring an end to the speculation that has swirled around Abraaj over the last months.”