Global consulting firm AlixPartners LLP has decided to redistribute embattled Abraaj Group Ltd.'s stake in Abraaj Growth Markets Health Fund to its other investors, Reuters reported Oct. 8, citing anonymous sources.
The $1 billion investment fund aims to provide high-quality healthcare to underserved low- and middle-income patients throughout sub-Saharan Africa and South Asia. Other investors in the fund include the Bill & Melinda Gates Foundation Trust, CDC Group PLC, International Finance Corp., Medtronic PLC and Proparco.
Abraaj is liquidating its assets and shutting down its operations following a probe into the alleged mismanagement of investors' money in the fund. TPG Capital Management LP will be taking over the healthcare fund, according to Reuters.
The Growth Markets Health Fund's investors appointed U.S.-based AlixPartners to decide Abraaj's fate in the fund. Some of the investors wanted to cut Abraaj out of the fund before the TPG takeover.
Details of the planned redistribution were not provided. But some local banks are now considering legal action against AlixPartners because the redistribution could leave them facing a prospect of no returns for the loans to Abraaj that were secured against the stake in the fund.
According to Reuters, the sources said the lenders see the decision to redistribute Abraaj's stake as the worst possible move for them.