Troubled Dubai-based private equity firm Abraaj Group has agreed to sell a huge chunk of its fund business to US investment management firm Colony Capital according to various media reports.
Abraaj, which recently began a restructuring plan for $1 Billion in debts owed to creditors is selling off the assets to repay the latter. The firm’s PE business include major stakes in more than 200 companies spread across the globe.
In Kenya, Abraaj’s interests are held under the Sub-Saharan Fund and include;
- 100% Stake in coffee chain Java House which is valued at more than Sh 10.3 Billion.
- 18 clinics and 10 hospitals which include major stakes in; Nairobi Womens Hospital, Avenue Group Hospital (56.2%), Metropolitan Hospital and Ladnan Hospital.
- A 10% stake in Brookside Dairy, the largest milk processing company in East Africa, controlling more than 60% of the market.
- 21% stake in Seven Sea Technology (SST), an IT solutions provider with operations in Kenya, Uganda and Rwanda.
According to Middle East publication “The National”, Colony Capital will acquire Abraaj’s “Latin America, Sub Saharan Africa, North Africa and Turkey Funds management business and its Limited Partnership interests in the underlying Funds, along with staff in the eight offices being transferred under the terms of the deal.”
This comes few days after Abraaj filed for a court-supervised restructuring as it battles allegations of misused funds according to reports by Bloomberg. Abraaj’s move was aimed at protecting it from filings made by some of its creditors to liquidate and wind up the firm after it defaulted on a $100 million loan.
In February, the Dubai PE fund was accused by four of its major investors in the health care business that their money wasn’t used for its stated purpose in Kenya and two other countries. The Bill & Melinda Gates Foundation, World Bank’s IFC, UK state run CDC Group and Proparco Group, who have pledged about 25% of the fund, hired U.S. corporate investigation firm Ankura Consulting to look into the matter. Results of the investigation indicate that money was moved out of the health-care fund according to Wallstreet Journal.
RELATED; Abraaj is selling its Kenyan interests including Java & 10% Brookside stake
