Air Arabia said in June that it had an exposure of $336m to funds managed by Abraaj Group
Sharjah-based carrier Air Arabia has filed a misdemeanour case against Abraaj founder Arif Naqvi.
In a statement, Air Arabia said the court filing follows earlier arbitration proceedings that took place in July.
“Air Arabia has investments outstanding with private equity firm Abraaj,” the statement said.
“In addition to Air Arabia’s claims submitted in the provisional liquidations of Abraaj Holdings and Abraaj Investment Management Limited, Air Arabia has commenced with legal proceedings against Abraaj founder Mr Arif Naqvi through the filing of a misdemeanour case in Sharjah court.”
With the move, the carrier becomes the first publicly-traded firm to initiate legal proceedings against the embattled firm.
In June, Air Arabia disclosed that it had an exposure of $336 million to Abraaj through fund portfolios and short-term loans.
The following month, Naqvi stepped down from the board of the airline.
“Air Arabia’s previously appointed team of experts continue to be fully engaged with the JPL’s (joint provisional liquidators), stakeholders and creditors involved in the matter as the court-supervised restructuring of Abraaj continues,” the statement added.
The Air Arabia statement added that its investments into Abraaj have had no impact on its operations.
‘”Air Arabia Group has a diverse investment portfolio and part of this is related to investment in Abraaj,” the statement added.
“Even though this issue has no significant impact on the carrier’s business or on its operations, Air Arabia remains fully committed to protect its investment and business interest.”
Abraaj at one point owned 17 percent of Air Arabia, which is publicly listed on the DFM. The carrier is believed to have loaned Abraaj over $100 million, according to previous media reports.