Abraaj in talks to sell its Java House interest and Brookside stake to UK fund Actis

KENYA- The British private equity fund Actis is set to acquire Abraaj Holdings’ Kenyan assets including Java House operations and a 10% stake in the country’s leading dairy firm, Brookside Dairy Africa, Business Daily reports.

This is after Reuters reported that Actis has placed a bid to acquire Middle East and North Africa private equity operations of Abraaj Group, as part of liquidation of the Dubai-based company.

According to the report, Abraaj investors were in favour of an international private equity firm despite other offers from Abu Dhabi Financial Group and Kuwaiti logistics firm Agility, which has significant operations in Kenya and other countries on the continent.

Actis bid however excludes Abraaj’s interests in Kenya’s healthcare facilities Avenue, Nairobi Women’s, Metropolitan and Ladnan Hospitals, bought using funds from an independent kitty, Africa healthcare Growth Fund.

Abraaj Group acquired 100% of East Africa’s leading coffee chain Java House for more than US$100 million from Emerging Capital Partners.

The Dubai Equity firm is a long-time investor in Brookside Dairy with 10% stake and in 2009, it invested US$18.7 million in the dairy company.

In 2014, French food group Danone acquired a 40% stake in Brookside as part of plans to expand in new markets while the controlling stake is owned by the Kenyatta family led by President Uhuru Kenyatta’s younger brother, Muhoho Kenyatta.

Abraaj woes

Abraaj’s misfortunes began this year when it was revealed that several limited partners including the Gates Foundation run by Bill and Melinda Gates were investigating its misuse of investor funds and appointed an auditor to trace the money.

Misuse of investor funds was linked to a number of Abraaj funds, a revelation that led to the departure of CFO as well as the CEO who handed over his role at the fund business.

Abraaj filed for provisional liquidation in the Cayman Islands in June to forestall several petitions by its funders after it delayed to pay for matured funds.

Also, Canada’s Brookfield Asset Management is in the frame to take over its Turkey fund, and United States-based Colony Capital its Latin America fund, according to sources familiar with Reuters.

US based TPG Capital is also in talks to acquire Abraaj’s healthcare fund to add to its Rise Fund while managing Abraaj Growth Markets Health Fund (AGHF)’s kitty worth about US$1 billion.

Actis which has investments in Africa, Asia and Latin America lined up US$300 million a year in investments in Africa in 2012.

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