Arif Naqvi (file picture) Image Credit: Reuters

Dubai: The Grand Court of the Cayman Islands has appointed PricewaterCoopers (PwC) as provisional liquidator of Abraaj Holdings and Deloitte as provisional liquidators of Abraaj Investment Management Ltd.

This was revealed by Abraaj Holdings Limited on Tuesday.

Abraaj filed a petition last week in the Cayman Islands, asking the courts there to appoint provisional liquidators for the embattled entities.

The court on June 18, 2018, made an order appointing Simon Conway of PwC Corporate Finance and Recovery (Cayman) Limited, as well as Michael Jervis and Mohammad Farzadi, also from PwC, as joint provisional liquidators (JPLs) of Abraaj Holdings.

“Subject to the final sealed order of the Cayman Court, this ensures that the rights of all stakeholders can be protected while the company and the JPLs promote a consensual restructuring of the company’s obligations,” the company said in a statement.

The court also heard an application by Abraaj Investment Management Limited (AIML) to appoint David Soden and Stuart Sybersma of Deloitte as joint provisional liquidators of the fund management business, Abraaj said in a statement.

“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. We are wholly committed to supporting the JPLs through this process and ensuring stability and value maximisation for all parties,” said Arif Naqvi, founder of The Abraaj Group.

Abraaj, once a rising star in the world of private equity, last week filed for a court-supervised restructuring as it fights allegations of commingling of funds and potential fund misuse.

The move comes less than five months after some of its investors, including the Bill & Melinda Gates Foundation, commissioned an audit to investigate the alleged mismanagement of money in Abraaj’s health care fund.

The company, which is estimated to have more than $13 billion under management, is facing legal challenges from investors and creditors, with these challenges compounding issues relating to liquidity. Among the various litigations, the most prominent are the cases filed by Kuwait’s Public Institution for Social Security earlier this month for the liquidation and winding up of Abraaj Holdings after it defaulted on a loan. A second creditor, Auctus Fund Ltd, also filed a petition in the Cayman Islands seeking repayment of loans owed.

In addition to the concerns raised by the unsecured lenders, a group of institutional lenders led by some of the leading international and UAE banks that have secured loan exposures to the company are understood to be seeking legal advice on their future courses of action.

The company said on Tuesday that it has the backing of secured creditors.

“Our secured creditors have provided their full support for the JPLs to work alongside the company to formulate and implement a restructuring of the company’s liabilities, which is in the best interest of all the creditors,” Abraaj said in a statement.

The decisions made by the Cayman court now enable Abraaj Holdings and Abraaj Investment Management to independently pursue court-supervised restructuring plans in an orderly fashion and for the benefit of their respective creditors. The court-supervised restructuring of Abraaj Holdings will have minimum impact on the day-to-day operations of the management of the funds and their portfolio companies.

Following the court order, the liquidators for Abraaj Holdings are authorised to take all necessary steps with a view to developing and proposing, in consultation with the company and its advisers, a restructuring of the company’s obligations.

The order grants extensive powers to the JPLs for the protection and management of the company’s assets, including maintaining oversight over board and management activities to maximise returns to the company’s stakeholders. The court-appointed liquidators expressed optimism that the process will be in the interest of all stakeholders.

“Our role as Joint Provisional Liquidators is to manage the restructuring of Abraaj Holdings in an orderly fashion, safeguard the assets of the company, and ensure that the interests of creditors, employees and broader stakeholders are fully served. The order by the court enables the company to swiftly move into a stable phase of operations whereby restructuring plans and asset disposals can be executed upon in a protected and controlled environment,” said Jervis, a partner at PwC and one of the joint provisional liquidators.