Qatari, U.A.E., Indian Lenders Face Exposure to Troubled Finablr - Bloomberg

Qatari, U.A.E., Indian Lenders Face Exposure to Troubled Finablr - Bloomberg:

Banks from Qatar, the United Arab Emirates and India risk losing millions of dollars due to their exposure to Finablr Plc, the foreign-exchange operator that’s preparing for potential insolvency, according to people with knowledge of the matter.

Qatar National Bank, Doha Bank, National Bank of Fujairah, Commercial Bank International and Bank of Baroda are still owed about $300 million by Finablr’s parent BRS Ventures, which is owned by Bavaguthu Raghuram Shetty, some of the people said, asking not to be identified because the matter is private. The loan was used to refinance a bridge loan for the acquisition of Travelex Holdings Ltd.

Shetty pledged about 56% of his shares in the London-listed firm as collateral for the loan when he was unable to repay it after Finablr’s initial public offering last May, the people said. Since listing, the shares have plummeted about 93%, giving Finablr a market value of 77 million pounds ($89 million) when it was halted from trading this week. That’s down from a peak of 1.5 billion pounds in December, making it one of the most value-destructive IPOs in London in recent years.

While all banks may struggle to recover the funds, Qatari lenders are likely to be hit the hardest due to an ongoing standoff between the gas-rich Gulf state and the U.A.E. where BRS Ventures is based. A group of countries, led by Saudi Arabia, cut commercial and political ties with Qatar in 2017 so it’s not clear how the Qatari banks could enforce their claims against Shetty’s company, the people said.