A Saudi Arabia-backed investment fund is liquidating the holding company of a United Arab Emirates oil storage company that has been plagued by financial reporting issues since going public in New York.
Brooge Energy Limited listed its shares on Nasdaq in 2019 through a merger with a special acquisition company that gave it a market valuation of more than $1bn.
The operator of oil storage facilities in the emirate of Fujairah had the backing of powerful Middle East investors including Sheikh Mohammed bin Khalifa bin Zayed Al Nahyan, the son of the previous president of the UAE, and claimed in its prospectus to have signed big contracts with unnamed international trading companies.
But Brooge subsequently had two Big Four auditors resign, restated tens of millions of dollars of improperly booked revenue from a related party and became subject to an examination of its financial statements from the US Securities and Exchange Commission.
Last month, an investment fund managed by Bahrain’s Asma Capital placed Brooge’s majority shareholder BPGIC Holdings into liquidation over unpaid debts. Asma is backed by Gulf sovereign entities such as Saudi Arabia’s Public Investment Fund, the Islamic Development Bank and Bahrain’s finance ministry.
BPGIC Holdings borrowed $75mn from Asma’s fund in 2019, but never paid any interest on the debt, according to Cayman Island court filings related to its insolvency, racking up more than $30mn of unpaid interest.
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