Almarai unveils key deal

Updated 31 March 2013
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Almarai unveils key deal

Almarai announced the boards of United Farmers Holding Company (UFHC) and Continental Farmers Group plc (CFG) have reached an agreement on the terms of a recommended cash offer to acquire all share capital of CFG, according to Tadwul website.
Following the announcement on 25 regarding Almarai’s participation as a founding shareholder holding 33 percent in the share capital of UFHC, a Saudi limited liability company, Almarai stated that it is pleased to announce to its shareholders that the boards of UFHC and CFG have reached an agreement on the terms of a recommended cash offer to acquire all of the issued and to be issued capital of CFG.
CFG is a diversified agricultural producer whose principal activity is the cultivation and distribution of arable crops. CFG has under management around 23,400 hectares in Ukraine and 2,700 hectares in Poland. Its high quality land portfolio has been developed by an experienced team using advanced farming techniques, local infrastructure and logistics capacities. CFG has a strong track record in yield improvement operational efficiencies and economies of scale.
The offer consists of cash and deferred consideration and values CFG at a maximum of 61.5 million pounds (around SR 350 million as at the date hereof). The consideration in relation to the offer will be payable by the UFHC by way of non-interest bearing, committed loans from its three shareholders, each in proportion to its percentage shareholding interest in the company. Almarai intends to finance its portion of the shareholders loan through a combination of operational cash flows and Islamic banking facilities (murabaha).
It is expected that the acquisition will be completed around June 2013, subject to completion of agreed terms and conditions and all relevant approvals and procedures.


UAE regulators ask corporates to declare exposure to Abraaj

Updated 16 min 53 sec ago
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UAE regulators ask corporates to declare exposure to Abraaj

  • Air Arabia admits $336 million exposure to Abraaj funds.
  • Abraaj sells its Latam, Sub-Saharan Africa, North Africa and Turkey Funds to Colony Capital.

DUBAI: The United Arab Emirates’ top securities regulator has asked UAE-listed companies to declare their exposure to Dubai-based private equity firm Abraaj, which filed for provisional liquidation last week.
The Securities & Commodities Authority sent a letter earlier this week and companies had until Thursday to submit their responses, Obaid Al-Zaabi, chief executive of the regulator, told Reuters.
Air Arabia, a Dubai-listed low-cost carrier, said this week that it had a $336 million exposure to Abraaj, which is the Middle East’s biggest private equity firm. Shares in the airline plunged because of these links.
Al-Zaabi said some companies in the UAE had exposure to Abraaj, without naming them.
A court in the Cayman Islands, where Abraaj Holdings is registered, ordered this week that PwC be appointed as provisional liquidators of the company and Deloitte as liquidators of Abraaj Investment Management Ltd.
Abraaj said that the latest restructuring agreement has received in-principle regulatory approval and is expected to close upon approval from the Cayman Islands court and other customary consents.
On Thursday, the Dubai Financial Services Authority (DFSA), which is the regulator of the Dubai International Financial Center (DIFC), said it would discuss “various matters” with the liquidators and “will continue to work toward safeguarding the interests of investors.”
The DFSA is involved because Abraaj has an entity regulated in DIFC.
Abraaj Group agreed to sell its Latin America, Sub-Saharan Africa, North Africa and Turkey Funds management business to US investment management firm Colony Capital Inc, the companies said on Thursday.
The sale agreement comes after months of turmoil at Abraaj in the wake of its dispute with four of its investors, including the Bill & Melinda Gates Foundation and International Finance Corp. (IFC), over the use of their money in a $1 billion health care fund. The group has denied it misused the funds.
The sale is part of a provisional liquidation and restructuring as set out in a court order. Financial terms of the deal were not disclosed.
Colony Capital has also agreed to oversee, on an interim basis, other Abraaj group funds that are not being acquired so that the group and all its stakeholders have a “comprehensive global solution in place,” the companies said.
The other group funds include the $1 billion health care fund, and some legacy funds of the private equity group.
Sources told Reuters earlier that US buyout firm TPG was in talks with investors in Abraaj’s health care fund to take over management of the assets of the $1 billion fund.
The K-Electric asset, which is being sold in Pakistan and is owned by Abraaj Holdings, is also not part of the transaction.
Colony’s deal comes after other investors such as Cerberus Capital Management had also made offers for the Abraaj business before it filed for provisional liquidation in the Cayman Islands.
A unit of Abu Dhabi Financial Group earlier this week made a conditional offer to buy Abraaj’s management interest in all of its limited partnerships for $50 million, according to a document seen by Reuters.
Since Abraaj’s row with some investors became public early this year, it split its investment management business and holding company, while its founder Arif Naqvi stepped aside from the day-to-day running of its private equity fund unit and the firm halted its investment activities.
Tom Barrack, executive chairman of Colony Capital, said that he hoped that the transaction would enable the process of rebuilding on all sides and also bring an end to the speculation that has swirled around Abraaj over the past months.