Customers at a UAE Exchange outlet in Dubai prior to the foreign exchange company being placed under supervision by the UAE Central Bank in March this year. Chief executive Bhairav Trivedi said he hopes to have the branches up and running soon after its current takeover deal concludes. Pawan Singh / The National
Customers at a UAE Exchange outlet in Dubai prior to the foreign exchange company being placed under supervision by the UAE Central Bank in March this year. Chief executive Bhairav Trivedi said he hopes to have the branches up and running soon after its current takeover deal concludes. Pawan Singh / The National
Customers at a UAE Exchange outlet in Dubai prior to the foreign exchange company being placed under supervision by the UAE Central Bank in March this year. Chief executive Bhairav Trivedi said he hopes to have the branches up and running soon after its current takeover deal concludes. Pawan Singh / The National
Customers at a UAE Exchange outlet in Dubai prior to the foreign exchange company being placed under supervision by the UAE Central Bank in March this year. Chief executive Bhairav Trivedi said he hop

Markets

Finablr in sale talks with Israel's Prism Advance Solutions

The deal, which will restructure and settle its debts, is set to conclude within a month

Michael Fahy
Michael Fahy

October 06, 2020

  • English
  • Arabic

Payments firm Finablr is in sale talks with Israeli company Prism Advance Solutions, the company confirmed on Tuesday.

Finablr, which has been in talks to find fresh funding for months, said the offer from the company has a number of key benefits, according to a statement to the London Stock Exchange, where the company's share used to trade. It will lead to a restructuring and settlement of all of the company's outstanding debts, a restructuring of its board and its subsidiary companies and it will provide necessary working capital. It will also look to complete a deal within a month.

"After months of hard work under very trying liquidity conditions compounded by the impact of the coronavirus on our operations, I am excited to now go forward with Prism," Bhairav Trivedi, chief executive of Finablr, said.

Finablr did not provide any details about the size of the bid.

"We are delighted with the Finablr deal, representing as it is the first major UAE-Israeli commercial transaction," Guy Rothschild, co-founder and director of Prism Advance Solutions, said. "We are very thankful to the UAE leadership and authorities who have been incredibly supportive of us. We look forward to working closely with them in the revival of the company."

Finablr owns a number of foreign exchange and digital payments companies including UAE Exchange, Xpress Money, Unimoni, Remit2India and Bayan Pay. It also previously owned the Travelex foreign exchange business, but that was taken over by its lenders in a separate restructuring exercise in July.

The company floated on the London Stock Exchange in May last year in a deal that valued the business at £1.23 billion ($1.5bn), but has faced a number of challenges this year that began with a cyberattack on Travelex, leading it to close down some of its UK operations over the New Year period. It also faced liquidity issues, which led the UAE Central Bank to step in and oversee operations at its UAE Exchange business in March. Its shares were suspended from trading in the same month.

In May, Finablr reported that its debt was $1bn higher than the $334.1m previously reported in its accounts. It appointed law firm Skadden Arps Slate Meagher & Flom to "investigate historic potential malfeasance within the Finablr Group and any misappropriation of assets" in July.

The group's employees "have worked at reduced or zero pay for some months and this deal is only possible thanks to their hard work and sacrifice", he added.

Prism's offer allows for the rebuilding of a "strong global remittance and digital payment platform headquartered in Abu Dhabi", Abubaker Al Khoori, chief executive of Royal Strategic Partners, said.

"I believe this will bring stability to Finablr that has been battling in crisis as well as confidence among clients, regulators, and creditors."

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

While you're here
BankingMarkets