Dubai-based private equity firm Abraaj Group Ltd. will meet creditors in the week of June 4 in a bid to prevent possible liquidation proceedings from happening, the Financial Times reported.
It comes as Kuwait's Public Institution for Social Security has filed a petition before a court in the Cayman Islands court system to liquidate the Dubai-based firm's assets, saying it is "substantially insolvent" and unable to repay a $100 million loan due June 3 and $7 million interest, The Wall Street Journal reported.
People close to the matter told the FT that Abraaj's executives and advisers have already approached the Kuwaiti pension fund to encourage it to stay away from proceedings that could hamper the potential sale of its asset management arm.
Meanwhile, some bank creditors including Société Générale SA, Mashreqbank PSC, Noor Bank PJSC and Commercial Bank of Dubai PSC are seeking advice from law firm Clifford Chance on a possible action that they could take against the embattled firm amid growing concerns about its ability to repay debt on time, Reuters said. One of the options reportedly being weighed is to give Abraaj time to dispose assets.
Abraaj told Reuters that it has taken a "collaborative position" to resolve the issue "to the satisfaction of concerned parties."
Abraaj's total loans amount to over $1 billion, according to the FT.
The Dubai-based private equity firm has been rocked since some investors in its $1 billion healthcare fund questioned how their money was handled, the reports noted.
