A group of international lenders is battling for greater transparency and governance changes at a major Dubai real estate investment trust ahead of a crunch vote on its restructuring plans on Monday, marking a rare case of investor activism in the Gulf.
Emirates REIT, the largest sharia-compliant Reit in the United Arab Emirates, faces resistance from a group of debtholders as it seeks to restructure a $400m Islamic bond, or sukuk, maturing in December 2022. A $10.2m payment is due later this month.
The dispute poses another challenge for the Gulf’s commercial hub as the UAE seeks to clear its reputation in the wake of several financial scandals, including the collapse of UK-listed, Abu Dhabi-based hospital operator NMC and the Dubai-based emerging markets private equity firm Abraaj.
Emirates REIT has described the restructuring as “a straightforward and voluntary amend and extend transaction . . . designed with the interests of sukuk holders in mind”. The vehicle, which is listed on Nasdaq Dubai, has said it is confident of securing the consent of the 75 per cent of bondholders required by June 7.
But a group of investors, referring to themselves as the “Ad Hoc Group”, is calling for better governance at the Reit’s manager, Equitativa, as one condition for agreeing to the restructuring. Equitativa is owned by Sylvain Vieujot and his wife, Magali Mouquet, who are chief executive and executive director of Emirates REIT, respectively.
Members of Ad Hoc include international asset managers such as Scotland’s Aberdeen Standard Investments and Vontobel of Switzerland, people familiar with the group said. Both of those asset managers declined to comment.
The group, which says its members hold 40 per cent of the debt, is calling for the manager to reduce what they argue are “excessive” management fees and to offer investors a better financial package for the restructuring.
