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Abu Dhabi, UAEWednesday 22 August 2018

Emirates NBD reports $39m exposure to embattled Abraaj 

The Dubai lender said it has both direct and indirect exposure to  private equity firm

Emirates NBD, the biggest lender in Dubai by assets, is the latest financial institution to declare its exposure to buyout firm Abraaj. Jeffrey E Biteng / The National 
Emirates NBD, the biggest lender in Dubai by assets, is the latest financial institution to declare its exposure to buyout firm Abraaj. Jeffrey E Biteng / The National 

Emirates NBD, the biggest lender in Dubai by assets, on Sunday joined the growing list of publicly-traded financial institutions in declaring their exposure to buyout firm Abraaj Group, which is reeling under allegations of misusing investors' funds.

Emirates NBD said it has both direct and indirect exposure to the embattled private equity firm. The lender owns a stake in the parent company Abraaj Holding Group worth $21.3 million (Dh78.2m), it said in a statement to Dubai Financial Market, where its shares are traded.

“In addition, Emirates NBD has a total exposure of $17.6m invested across three of Abraaj funds,” it said without the naming the funds.

Emirates NBD is the latest Dubai lender to disclose its financial ties to Abraaj, after Commercial Bank of Dubai and Mashreq Bank last week revealed their exposure to the company.

CBD has $166.3m worth of exposure to the buyout firm through “secure credit facilities," it said on Thursday in a bourse filing. Mashreq, one of the oldest banking institutions in Dubai, owns 16.7 million shares in Abraaj Holding valued at Dh66.03m, it said in a separate statement to the bourse. Mashreq also controls 12.5 million shares in Menasa Capital Holding, a Dubai International Financial Centre subsidiary of Abraaj, worth Dh459,125, it added on Thursday.

There has been a string of disclosures over the past few days after listed companies were directed by the market regulator, the Securities and Commodities Authority, to divulge their financial ties and dealings with Abraaj.

"Based on the disclosures made so far, it seems that for most banks the impact is manageable," Shabbir Malik, banking analyst at EFG-Hermes, said on Thursday. "For Mashreq and most banks who disclosed exposure to Abraaj, there should not be a material impact on their profitability."

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Read more:

Dubai lenders Mashreq, CBD join FAB in declaring Abraaj exposure

Dubai Financial Services Authority to investigate Abraaj mismanagement claims

Abraaj founder Naqvi to skip hearing to avoid possible arrest

Abraaj founder Naqvi faces UAE court ruling over bounced cheque

Abraaj restructuring request approved by Cayman Islands court

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Shuaa Capital on Wednesday said the company and its clients have a 3.6 per cent stake collectively worth $8.83m in The Abraaj Buyout Fund II. Ajman Bank said it has no direct exposure but is involved in a syndicated funding to Stanford Marine, a company that is 51 per cent owned by Abraaj Capital.

The Dubai-listed financial institutions join companies such as First Abu Dhabi Bank, Air Arabia and Union Arab Bank who earlier reported their exposure to Abraaj, which is undergoing a court-supervised restructuring.

FAB on Tuesday said it has direct exposure to the buyout firm through a fully secured three-year $21.4m loan maturing in April. Sharjah-based budget airline Air Arabia said last month it has an exposure of $336m to Abraaj through fund portfolios and short-term investments.

Companies such as Emaar Malls, Arabtec, Dubai Investments, Tabreed, Deyaar, Mazaya and the DFM Company have said they had no exposure to the private equity firm.

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