Air Arabia will report an accumulated loss of AED 307 million ($83.5 million) due to its exposure to embattled private equity firm Abraaj, the company said in a statement on Wednesday.
In June, Air Arabia disclosed that it had an exposure of $336 million to Abraaj through fund portfolios and short-term loans.
“The carrier will report an accumulated loss of AED 307 million, subject to ratification by Air Arabia shareholders at the company’s annual general meeting,” the company statement said.
The statement added that “while Air Arabia’s liquidity status and profitable operations remain intact, this step aims to serve the best interests of the company and its investors.”
In January, Air Arabia announced it had filed a misdemeanour case against Abraaj founder Arif Naqvi. The move followed earlier arbitration proceedings that took place in July.
The private equity firm is currently undergoing a court-supervised restructure and is trying to sell off parts of the business to repay its debt.
“Not withstanding this accounting treatment, Air Arabia Group is actively seeking to maximise the realisation of this investment and remains fully engaged with the JPLs [joint provisional liquidators] and stakeholders involved in the matter while legal proceedings taken by Air Arabia and the ongoing court-supervised restructuring of Abraaj continues.”
Air Arabia posted a net profit of AED 26 million ($7.07 million) in Q4 2018, with a total turnover of AED 1 billion ($272.25 million) for the three-months ending in December – a 20 percent increase from the same time period in 2017.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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