Barak Says High Portion of Investors Support Fund Restructuring

Barak Fund Management is confident that a restructuring proposal for its frozen trade finance fund will be approved by investors, the firm said Friday.

A “high percentage” of investors have shown support for the firm’s plans and intend to remain on board, with approval likely to come at its annual general meeting, Barak said in an emailed statement. The firm is also continuing to service its borrowers, it said.

The Mauritius-based firm is seeking to spin off the fund’s illiquid holdings into separate vehicles, according to documents sent to investors last month and seen by Bloomberg. The fund was frozen last year as some investments became trapped in a series of hard-to-sell assets across the continent of Africa.

“We have taken firm steps to protect our investors by implementing a temporary suspension of trading in the fund,” Barak Chief Executive Officer Jean Craven said in the statement. “This has given us valuable time to find a lasting solution to the liquidity constraints some of our investments are experiencing.”

Last month, the firm told clients that the investment objectives of the fund were no longer “reasonably achievable” and asked its board to maintain the suspension and proceed with an “orderly realization of the assets,” according to the investor document.

Barak’s auditor, PwC, resigned last year before completing the 2019 audit of the fund, according to the document.

The firm has now agreed with its current auditor to “perform a rollover and continue with the completion of the December 2020 year-end audit immediately on sign-off of the 2019 audit in order to avoid any further delays,” according to Friday’s statement.

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