Dubai: Air Arabia said on Wednesday it has $336 million (Dh1.2 billion) invested in Abraaj funds but said its exposure to the embattled group will not impact its operations.
An Air Arabia spokesperson stressed that “there is no significant impact on Air Arabia’s daily or future business or on its liquidity status” as a result of its exposure to Abraaj, which on Thursday filed for provisional liquidation in the Cayman Islands.
The Sharjah-based airline said that its business is operating as usual, and that it will provide further updates on the matter when they become available.
“The impact of this issue is limited to the investment portfolio of Air Arabia Group,” the spokesperson said.
The statement comes two days after Air Arabia confirmed that it has an investment in funds under Abraaj - concerns on which led to the carrier’s share prices falling over 7 per cent on Monday, and sliding on Tuesday, though they ended the day flat.
On Wednesday, Air Arabia’s share prices were also in the red, though just by 0.95 per cent to end at Dh1.04, with the stock being one of the most actively traded in the market.
The founder of Abraaj, Arif Naqvi, serves as a board member at Air Arabia.
Air Arabia’s exposure to Abraaj was through fund portfolios and short-term investments, the low-cost carrier said. The investment value of $336 million (Dh1.233 billion) is on the higher end of what was speculated, with one analyst telling Gulf News that the exposure could be valued anywhere between Dh500 million to Dh1.4 billion, based on Air Arabia’s financial statements.
“Air Arabia’s appointed team of experts is actively engaged with all stakeholders and creditors involved in the matter to ensure Air Arabia’s investment and business interest [are] protected,” the spokesperson said.
“In addition, we have an appointed legal representative before the court and who is closely involved in all proceedings following the court’s decision.”
On Tuesday, the Grand Court of the Cayman Islands approved Abraaj’s filing, appointing PwC as provisional liquidator of Abraaj Holdings and Deloitte as provisional liquidators of Abraaj Investment Management.
When it filed for liquidation, Abraaj asked the court to appoint PwC as provisional liquidators, saying that the move will “[allow] time for a proposal to be put to creditors for the orderly restructuring of the company.”