"Unusual" Abraaj manners revealed as PwC searches for missing documents

Abraaj Holdings had an "unusual" business model based on short-term borrowings, and the main financial statements are missing or non-existent, according to one of the companies charged with saving the assets of the company. Private company based in Dubai.
In a Bloomberg News report, PricewaterhouseCoopers stated that it was "unable to obtain stand-alone annual financial statements or management accounts for the company." He noted "multiple levels of leverage" when the company was not able to do so. the company borrowed to make up for a long-standing lack of liquidity. between investment management fees and operating expenses. "
This is an" unusual practice for a structure operating in a private equity capacity, "said PwC." It creates a very volatile economic model, sensitive to volatility and crises potential liquidity, especially when the cost base can not be funded from permanent income, "according to the report, which was filed in a Cayman Islands court on July 11.
Deloitte and PwC were recruited as liquidators 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 the money of investors in a health care fund, triggering a series of cases of Voluntary liquidation in the Cayman Islands years.
According to PwC, under caiman rules, companies like Abraaj, founded in 2002 by the Pakistani executive Arif Naqvi, do not need to file independent financial statements, but it is "very irregular "that such a firm does not do then. A spokeswoman for Abraaj said 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 "
" This lack of financial recordkeeping raised the question of how the directors of the The company could make sure that the company was solvent and managed efficiently, "the report says.
Abraaj Holdings lost $ 188 million at the end of March after plunging investors into money to manage its operations, ranking shows. 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 investor consent, the report said [19659007]. "Although the company has total assets of $ 1 billion, more than $ 900 million of secured debt is tied to this debt. According to PwC's estimates, the value of the net residual asset is only $ 147.7 million
. Since the initial liquidity crisis of the company, allegations of mismanagement in other funds have emerged. According to an audit by Deloitte, Abraaj still owed $ 94.6 million to its Private Equity Fund IV after blending investor funds with its own, according to the results of a Bloomberg review.
The latest PwC report says that Abraj owes a total of 170.8 He manages two funds – Private Equity Fund IV and Infrastructure and Growth Capital Fund.
The repurchase company sought to sell its unit of funds and also the holdings that 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 ongoing, said an Abraaj spokeswoman at the time.
Meanwhile, lenders have declared their exposures to the firm, Commercial Bank of Dubai PSC exhibiting at $ 166.3 million. According to a statement released Thursday, credit facilities Abu Dhabi's first PJSC bank has granted a three-year 21.4 million euro term loan to Abraaj Holdings, while Mashreqbank PSC has an exposure. total of 66.46 million dirhams (18 million euros) to Abraaj and its funds.