Troubled emerging markets firm Abraaj Group has filed an application for court-supervised restructuring, according to a statement released on Thursday by the firm.
The move imposes a moratorium on the enforcement of all unsecured claims against the firm and grants it time to devise a proposal for restructuring and put it to creditors, the statement notes. The application has been filed in the Cayman Islands, because it is the jurisdiction of incorporation for many of Abraaj’s subsidiaries.
According to the statement, the application is supported by the company’s secured creditors, who expressed “a desire for provisional liquidators” to be appointed. The proposed liquidators are named as Simon Conway, Michael Jervis and Mo Farzadi of PwC.
Arif Naqvi, the founder of Abraaj, described the process as “humbling, exhausting and testing for us all”. Naqvi’s statement:
“This process marks the culmination of an extremely complex and challenging phase of negotiations and detailed planning. Since our differences with certain investors first came to light, we have worked exhaustively and transparently to investigate the matter and address their concerns, all the while ensuring our tremendous investment teams around the world continue to support the growth of our partner companies.
“The intense public scrutiny and highly speculative rumours on these matters have put enormous stress on the Abraaj family of employees and partners, together with our investors and other stakeholders. We appreciate the support we have received from many who understand our circumstances and believe in the fundamental mission we have strived for the past 16 years to fulfil – investing for impact and driving growth. I want to thank our regulators, management teams, colleagues, lenders and advisors for working tirelessly to bring us to this point.
“Keeping the interests of the Limited Partners in the Funds managed by Abraaj Investment Management Limited (AIML) during this turbulent period has been paramount. The fact that the approximately 50 companies in the current generation of Funds have kept growing during these recent turbulent months demonstrates the resilience and quality of their management teams and our investment professionals. Regardless of their future ownership, we are confident that the Funds will achieve above-market returns in the years to come. The provisional liquidation of Abraaj Holdings will create a more controlled basis for moving forward, without impacting the day to day management of the Funds and the underlying portfolio businesses. An independent AIML, under new ownership, will be stabilising for all who are associated with the asset management business.
“The process of court supervised restructuring will take a few months. I will continue to support this orderly process and help ensure the best possible outcomes for all the stakeholders. The past four months have been humbling, exhausting and testing for us all but when I reflect on the past 16 years, I am proud of the positive impact that Abraaj has had on the markets and communities it serves.”
Abraaj Holdings is being advised by Houlihan Lokey and law firms Allen & Overy, Carey Olsen and Milbank, Tweed, Hadley & McCloy.
Statement in full: