Abraaj investors say they are owed $300m

Pedro Gonçalves
Abraaj investors say they are owed $300m

Investors in the $1.6bn Abraaj Group fund claim they are owed at least $300m by the troubled Middle Eastern private equity firm and are prepared to go to court if an acceptable agreement with court-appointed liquidators Deloitte and PwC cannot be reached.

The investors’ council said Deloitte and PwC have made “insufficient progress” to stem losses tied to “mismanagement and apparent fraudulent activity” by Abraaj since they were appointed in June, according to a letter seen by Bloomberg.

The estimate of what is owed to Private Equity Fund IV by Abraaj is nearly triple the $94.6m found after a review by Abraaj’s accounting firm Deloitte in June.

The investors said the process of selling the firm is taking too long despite interest from parties including Cerberus Capital Management, Colony Capital Crescent Capital and Agility Capital.

“The council has frankly run out of patience,”  according to the letter dated August 13.

The investors are also seeking to stop paying management fees to Abraaj, citing breach of duties to the fund.

Abraaj Group, which managed $14bn at its peak, took the unusual step of filing for provisional liquidation in June, and is now undergoing a court-supervised restructuring in the Cayman Islands.

The measures are a response to allegations by some investors earlier this year that Abraaj misused moneys invested in a $1bn healthcare fund.

The group recently hired advisory firm Alvarez & Marsal Holdings LLC to help recover money owed by Abraaj, as reported by International Investment.