Air Arabia Shares Fluctuate on Exposure to Abraaj Funds

(Bloomberg) -- Air Arabia PJSC swung between gains and losses after the airline disclosed exposure to funds managed by Abraaj Group Ltd., the Dubai-based private equity firm that’s battling creditors.

The shares fell as much as 3.8 percent in Dubai before rising 2.9 percent. Trading volume was at about six times the 30-day average. The stock declined 7.1 percent on Monday.

Air Arabia said on Monday a team of experts is "actively engaged with all stakeholders and creditors involved with the matter” to protect its investments, without providing financial details. Abraaj’s founder Arif Naqvi is a board member at the Sharjah, United Arab Emirates-based Air Arabia.

“We would like to see Air Arabia disclosing all details today; investors can’t continue to trade the stock blindly,” said Tariq Qaqish, managing director of the asset-management division at Mena Corp. Financial Services LLC in Dubai. “As an investor, corporate governance seems to be just words on the yearly audited financial reports.”

Air Arabia Shares Fluctuate on Exposure to Abraaj Funds

Abraaj, once one of the developing world’s most influential investors, last week filed for a court-supervised restructuring as it fights allegations of misused funds. The move comes less than five months after some of its investors, including the Bill & Melinda Gates Foundation, commissioned an audit to investigate the alleged mismanagement of money in Abraaj’s healthcare fund.

Since then, the company, which once managed almost $14 billion for institutions and supranational agencies, has faced growing concerns about its viability. Kuwait’s Public Institution for Social Security earlier this month filed a petition for the liquidation and winding up of Abraaj Holdings after it defaulted on a $100 million loan. A second creditor, Auctus Fund Ltd., also filed a petition in the Cayman Islands.

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