Abu Dhabi’s Mubadala halts Abraaj investment deal talks

Abu Dhabi state investor Mubadala has halted talks to buy Abraaj’s investment business. (AFP)
Updated 23 April 2018

Abu Dhabi’s Mubadala halts Abraaj investment deal talks

ABU DHABI: Abu Dhabi state investor Mubadala has halted talks to buy Abraaj’s investment business, two sources said, in a blow to the private equity firm which is facing an investigation by investors into how it used some of their money.
Dubai-based Abraaj, which denies any wrongdoing, is considering selling some or all of the unit following a row with four investors, including the Bill & Melinda Gates Foundation and the World Bank’s International Finance Corporation, over how it used their money in a $1 billion health care fund.
Mubadala, which has more than $200 billion in assets, and Abraaj held initial talks a month ago, but these did not progress, one of the sources said.
Abraaj said it does not comment on market speculation, while Mubadala declined to comment on Monday.
“We remain focused on working collaboratively with our investors and continuing to execute on the re-organization of our firm to pave the way for continued long-term growth and value creation,” Abraaj said in an email to Reuters.
Investment banks have also approached international private equity firms to look at Abraaj’s investment arm, but some are holding off until after an investigation by forensic accounting experts Ankura Consulting, which has been commissioned by the investors, two other sources said.
Other potential buyers include Abu Dhabi Financial Group (ADFG), sources said last month.
ADFG, which manages $6.5 billion in assets, declined to comment about its interest in Abraaj’s investment business. The Gates Foundation and the IFC, the World Bank’s private finance arm, have both declined to comment on the row.
SHAKE-UP
The fund dispute, which erupted this year has jolted Abraaj, a top investor in the developing world founded in 2002 by Arif Naqvi, who in late February handed the running of the fund to two co-chief executives.
Abraaj has also shaken up its management, suspended new investments, freed up large investors from millions of dollars in capital commitments and is reviewing its corporate structure.
It was managing $13.6 billion before deciding to return $3 billion to investors and putting a new $6 billion fund on hold.
Naqvi remains CEO of Abraaj Holdings, a significant shareholder of Abraaj Investment Management Ltd, the fund management business. Sources say he has spoken to senior bankers about various options for the firm, although Abraaj has not formally hired an adviser to sell the business.


Oil prices surge after attacks hit Saudi output

Updated 16 September 2019

Oil prices surge after attacks hit Saudi output

  • The Houthi attacks hit two Aramco sites and effectively shut down six percent of the global oil supply
  • President Donald Trump said Sunday the US was ‘locked and loaded’ to respond to the attacks

HONG KONG: Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world’s top producer by half, fueling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.
Brent futures surged $12 in the first few minutes of business — the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent — while WTI jumped more than $8, or 15 percent.
Both contracts pared the gains but were both still more than 10 percent up.
The attack by Tehran-backed Houthi militia in neighboring Yemen, where a Saudi-led coalition is bogged down in a five-year war, hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.
Trump said Sunday the US was “locked and loaded” to respond to the attack, while Secretary of State Mike Pompeo said: “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”
Tehran denies the accusations but the news revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.
“Tensions in the Middle East are rising quickly, meaning this story will continue to reverberate this week even after the knee-jerk panic in oil markets this morning,” said Jeffrey Halley, senior market analyst at OANDA.
Trump authorized the release of US supplies from its Strategic Petroleum Reserve, while Aramco said more than half of the five million barrels of production lost will be restored by tomorrow.
But the strikes raise concerns about the security of supplies from the world’s biggest producer.
Oil prices had dropped last week after news that Trump had fired his anti-Iran hawkish national security adviser John Bolton, which was seen as paving the way for an easing of tensions in the region.
“One thing we can say with confidence is that if part of the reason for last week’s fall in oil and improvement in geopolitical risk sentiment was the news of John Bolton’s sacking ... and thoughts this was a precursor to some form of rapprochement between Trump and Iran, then it is no longer valid,” said Ray Attrill at National Australia Bank.