(MENAFN- Khaleej Times) Debt-ridden private equity firm Abraaj Group said on Thursday that Colony Capital, a global real estate and investment management firm, has agreed to buy some of its key funds as part of a court-supervised restructuring process.
The US asset manager reached an initial agreement to acquire Abraaj's Latin American, sub-Saharan African, North African and Turkey fund-management businesses, as well as its limited-partnership interests in the underlying funds, the embattled buy-out firm said in a statement. Staff in eight offices will be transferred as part of the pact.
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," said Abraaj, one of the world's largest emerging markets private equity firms.
The funds acquired by Colony Capital include the Abraaj Africa Fund III, which has assets of $990 million, the Abraaj North Africa Fund II with assets of $375 million, the Abraaj Turkey Fund I with $526 million and the Abraaj Latin America Fund II, which has assets of $545 million.
Tom Barrack, executive chairman of Colony Capital, said the comprehensive global solution for Abraaj and its stakeholders could 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.
Arif Naqvi, founder of Abraaj Group, said the appointment of the joint provisional liquidators and the start of the process of restructuring is a moment of introspection.
"We are pleased to join the Colony platform and team which allows us to continue building our businesses in the fast-growing markets that we have been committed to for over two decades," said Selcuk Yorgancioglu and Omar Lodhi, co-chief executives of Abraaj Investment Management Limited.
Michael Jervis, partner at PricewaterhouseCoopers and joint provisional liquidator of Abraaj Holdings, said it is an important milestone towards achieving the overall objectives of the provisional liquidation and restructuring as set out in the court order.
"We shall be consulting with our creditors in the coming days on this planned transaction prior to seeking the approval of court."
On Monday, the Grand Court of the Cayman Islands appointed representatives of PricewaterhouseCoopers as joint provisional liquidators of the Abraaj Holdings, the Middle East's biggest private equity firm.
In parallel, the court also appointed representatives of Deloitte as JPLs of Abraaj Investment Management Limited (AIML).
"We are pleased to have agreed a sale of certain of AIML's business units and assets in such a short timeframe, allowing, in line with our restructuring mandate, for these business units to continue to trade and ensuring continuity of service to investors and employment for the members of staff employed in these regions. The next step is to seek sanction of the Cayman Islands court for the transaction, which will be undertaken on an expedited basis," said Stuart Sybersma, partner at Deloitte and joint provisional liquidator of AIML.
Abraaj, founded by Naqvi with $60 million in 2002, had filed for liquidation in a move is to thwart separate legal action by the Kuwait Public Institution for Social Security and another creditor, who were seeking the liquidation and winding up of the firm for non-payment of debt.
-
Issac John Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.
MENAFN2206201800490000ID1097057206
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.