Troubled private equity firm Abraaj Investment Management is set to get a 70% stake in C&I Leasing by converting a $10m loan into equity in the Nigerian company.
C&I Leasing stated that representatives of Abraaj - managers of the Aureos Africa Fund, confirmed their intention to convert the loan stock to equity at a board of directors' meeting of C&I Leasing held in December 2018.
Andrew Otike-Odibi, managing director of the Nigerian company, said the proposed debt-to-equity deal would be a positive deal for the company as it improves the capital structure of the company and helps position it favourably for additional capital raise from the market in first quarter 2019.
"Abraaj knows that pulling out $10m will be detrimental to the growth of the business, so rather than cash out, they decided to convert,"he told Bloomberg.
In December, C&I Leasing had revealed the intention to restructure its issued and paid-up share capital by consolidating every four ordinary shares of 50 kobo each currently held into one new ordinary share of 50 kobo.
The Dubai-based private equity firm, which has around $13.6bn assets under management, earlier this year was said to have misused funds earmarked for the Abraaj Growth Markets Health Fund.
Once one of the most high-profile private equity companies in the Middle East until its dramatic failure, is being restructured by liquidators in a bid to settle more than $1bn of its debts through asset sales.