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Abu Dhabi, UAESunday 18 November 2018

Abraaj founder Naqvi resigns from Air Arabia board

The UAE’s only publicly-traded carrier is looking for a replacement

The bounced cheque case is the second criminal case filed against Mr Naqvi by Mr Jafar in recent months on the same grounds.Sarah Dea / The National
The bounced cheque case is the second criminal case filed against Mr Naqvi by Mr Jafar in recent months on the same grounds.Sarah Dea / The National

Arif Naqvi, the founder of embattled private equity firm Abraaj Group, resigned from the board of Air Arabia, Sharjah's low-cost carrier said on Sunday.

The airline, which announced the resignation in a statement to the Dubai Financial Market where its shares are traded, did not say when Mr Naqvi resigned or the reason behind his move. Air Arabia said it will nominate a replacement in the coming weeks.

Abraaj, which has filed for provisional liquidation in the Cayman Islands, owns an undisclosed stake in Air Arabia, according to the private equity company’s website. At the height of the Middle East's aviation boom in 2007 and high oil prices, Abraaj had a 17 per cent stake in Air Arabia.

The carrier's present top shareholder is Sharjah Asset Management with 18.53 per cent stake, followed by Al Maha Holding with 9.2 per cent.

In June, Air Arabia said it has a $336 million (Dh1.23bn) exposure to funds managed by Abraaj, while affirming there is "no significant impact" on its business or liquidity status. The airline has appointed a team of experts to ensure its rights are being protected during the court-supervised restructure of Abraaj's funds.

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Read more:

Abraaj founder faces new bounced cheque case in latest blow to private equity firm

Air Arabia Q2 profit dips 24% on flat passenger numbers

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Mr Naqvi faces a new criminal case over a bounced cheque, complicating ongoing negotiations between him and a creditor to reach an out-of-court settlement over unpaid debts, his lawyer said last month.

The value of the bounced cheque is Dh798m and a hearing has been scheduled in the UAE on Tuesday, Habib Al Mulla, executive chairman of Habib Al Mulla Baker Mackenzie, told The National in July.

Air Arabia, the UAE's only publicly-listed airline, posted a 24 per cent decline in its second-quarter net profit as the number of passengers carried and seats filled remained flat.

Net profit in the three months ending June 30 reached Dh120m compared with Dh158m a year earlier despite the "economic pressure" that airlines witnessed in the second quarter of the year, driven by lower yield margins, higher fuel prices and seasonality shift in traffic, the airline said.