Essdar Capital Managers Ltd., the distressed debt funds company whose major shareholder is the Abu Dhabi royal family, will seek to buy bad loans from banks across the Gulf Arab region as it plans a new $500 million fund.
The loans at banks in countries including the United Arab Emirates and Kuwait will offer “a very consistent long-term opportunity” in the next three to five years, Suketu Sanghvi, Essdar’s senior managing director, said in an interview in Dubai on Sept. 30. Essdar will seek to purchase these loans at 20 to 30 cents on the dollar and will sell assets backing the loans or set new terms on them, Sanghvi said.
Non-performing loans soared in the U.A.E. and across the Gulf as economic growth slowed after the global credit crisis sparked loan defaults. Provisions for bad loans at U.A.E. banks rose 41 percent in August from a year ago to 37.2 billion dirhams ($10.1 billion), according to the central bank.
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