[ad_1]
Abraaj Holdings had an "unusual" economic model based on short-term borrowing, and the main financial statements are missing or non-existent, according to one of the companies charged with saving the assets of the private equity firm based in Dubai.
In a report published by Bloomberg News, PricewaterhouseCoopers stated that it had "been unable to obtain stand-alone annual financial statements or management accounts for the company."
She noted "several levels of debt" when the company borrowed to offset a "long-term liquidity gap between investment management fees and operating expenses".
This is "an unusual practice for a structure operating in a private equity capacity," said PwC.
"This creates a very unstable economic model, sensitive to volatility and potential liquidity crises, especially when the cost base can not be financed by permanent income," according to a July 11 report to a court of the Cayman Islands.
Deloitte and PwC were hired as interim liquidators of Abraaj, one of the largest private equity firms in the Middle East, which owes more than a billion dollars to its creditors.
After an audit required by the charitable foundation of Bill Gates and others, the buyout company had problems after being accused of mingling investors' money with his in a health fund, setting in motion a series of liquidation deposit events in the Cayman Islands last month.
Missing Audits
According to PwC, according to Cayman rules, companies like Abraaj, founded in 2002 by Pakistani leader Arif Naqvi, do not need to file autonomous financial statements, but it is "very irregular "for such a firm. do this.
A spokeswoman for Abraaj said that she could not comment on a confidential report, while a representative of PwC declined to comment.
PwC, who listed a dozen institutions among Abraaj's creditors, also stated in his record that the repurchase company had not held any independent audit reports .
"This lack of financial recordkeeping raised the question of how the company's directors were able to ensure that the business was solvent and effectively managed," says report.
Abraaj Holdings recorded a $ 188 million loss at the end of March after plunging itself into investors' money to manage its operations, according to the rankings.
The company owes $ 1.1 billion to lenders after K-Electric's delayed sale to Pakistan led it to operate its health care fund without the consent of investors, according to the report.
From 2014 to 2017, "management fee income and deferred interest was insufficient to cover the significant operating costs of the Abraaj Group, so that any liquidity shortfall was largely funded by new borrowing. "Said PwC.
Although the company has total assets of $ 1 billion, over $ 900 million of secured debt is attached to this pool, leaving the residual net worth at $ 147.7 million, according to PwC estimates .
Since the initial liquidity crisis of the company, allegations of mismanagement in other funds have emerged. An audit by Deloitte revealed that Arabaj still owed $ 94.6 million to its Private Equity Fund IV after mixing investor funds with its own, according to the results of a Bloomberg review.
According to the latest PwC report, Abraaj owes a total of $ 170.8 million to two funds that it manages: the Private Equity Fund IV and Infrastructure and the Growth Capital Fund.
The repurchase company seeks to sell its unit of funds and the shares it holds in the funds. Cerberus Capital Management LP and Colony Capital Inc. have made new offers to buy some of Abraaj's assets, said people familiar with the case this week.
Discussions about the sale of the company 's asset management activities are underway, said an Abraaj spokeswoman at the time.
Meanwhile, lenders have reported their exposures to the company, with Commercial Bank of Dubai PSC putting its exposure to $ 166.3 million in secured credit facilities, according to a statement on Thursday.
First Abu Dhabi Bank PJSC has granted Abraaj Holdings a fully guaranteed three-year $ 21.4 million term loan, while Mashreqbank PSC has an aggregate exposure of Dh66.46 million ($ 18 million) ) to Abraaj and his funds.
For all the latest banking and financial news from the UAE and the Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, updated daily .
[ad_2]
Source link
