Abraaj said to tell creditor stake sales will aid liquidity possible issues

Dubai-based firm last week met banks, including Societe Generale and Mashreqbank that have the biggest exposure, sources said

Founder and Group Chief Executive of The Abraaj Group Pakistani Arif Naqvi speaks during a press conference next to the Executive Director of the International Trade Centre Arancha Gonzalez and Panama Canal Administrator Jorge Quijano (out of frame) during the World Economic Forum on Latin America in Playa Bonita, near Panama City, on April 2, 2014. AFP PHOTO / Rodrigo ARANGUA / AFP PHOTO / RODRIGO ARANGUA
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Abraaj Group told creditors the sale of a stake in its fund-management unit and its Pakistani utility will help resolve potential liquidity issues, according to people with knowledge of the matter.
The Dubai-based firm, roiled by allegations of misused funds, last week met banks, including Societe Generale and Mashreqbank that have the biggest exposure, the people said, asking not to be identified because the meeting wasn't public.
Abraaj told lenders it's close to finding a buyer for the asset-management stake and will soon complete the disposal of its holding in K-Electric, they said.
Abraaj raised a loan from Mashreqbank pledging the proceeds from the K-Electric sale, one of the people said. Abraaj declined to comment, while Societe Generale and Mashreqbank didn't immediately respond to requests for comment.


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The Middle East's biggest buyout firm is seeking to reassure banks and investors after allegations that it misused client money - including from the Bill & Melinda Gates Foundation and the World Bank - sent shock waves through the ranks of local deal makers. The company, founded by Arif Naqvi in 2002,  is reorganising its structure - with founder Arif Naqvi ceding control of the fund- management unit - and plans to introduce new internal controls.
It has also cut about 15 per cent of its total workforce.
Abraaj is said to be in talks to sell a majority stake in its asset-management unit to Colony NorthStar. The company is selling the division to raise cash amid heightened scrutiny and to help stabilise the business, people said in March. Abraaj's cash position has been eroded as one of its largest-ever exits, the proposed sale of a 66.4 per cent stake in K-Electric, is yet to be completed. The company had agreed to sell the asset to Shanghai Electric Power Co for $1.77 billion in October 2016, but the deal has been held up due to negotiations over electricity tariffs with the government, according to people aware of the matter.