One week after the Abraaj Group founder Arif Naqvi reached an out-of-court settlement with a creditor in a criminal bounced cheque case – reducing the risk of complicating thecompany’s ongoing restructure – we provide an update on the latest developments.

At what stage is the provisional liquidation?

A judge in the Cayman Islands approved a court-supervised restructure of the private equity firm on June 19, so the process has been under way for more than two months.

Ever since four investors in Abraaj’s $1 billion Growth Markets Health Fund – including the Bill & Melinda Gates Foundation, the World Bank’s International Finance Corporation, the UK’s CDC Group and Proparco Group of France – alleged mismanagement of funds in February and hired Ankura Consulting to find out where their money had gone, Abraaj’s reputation has unravelled.

The key focus for provisional liquidators is to pay down its estimated $1bn of debt by selling funds and other parts of the business. Investigators are trying to find out what happened to investors’ money, with reports of co-mingling funds (taking money allocated for a particular purpose and using it elsewhere) to help Abraaj meet its cashflow needs. Abraaj and its founder Mr Naqvi both deny any wrongdoing.

Who has expressed an interest in buying Abraaj?

Several companies have been named in the media as interested parties in talks to buy the group’s asset management division, Abraaj Investment Management Limited, its funds management business, or stakes in various funds.

These include US asset manager Cerberus Capital Management, which reportedly pulled out of talks to buy AIM in July, York Capital Management, which offered $50 million for AIML and a further $350m to buy Abraaj’s stakes in some of its private equity funds, and Colony Capital, which agreed to buy Abraaj’s Latin America, Sub-Saharan Africa, North Africa and Turkey funds management business in June, but has since reportedly walked away from the deal.

More recently, British emerging market investment firm Actis has bid to buy the bulk of the funds business, while other prospective buyers have included Kuwait’s Agility (with Centerbridge Partners of New York), and Abu Dhabi Financial Group.

What actions have UAE authorities taken?

DIFC Courts appointed provisional liquidators in August to oversee the winding up of Abraaj’s Dubai entity, Abraaj Capital Limited, which is incorporated at the Dubai International Financial Centre free zone. At the same time, DIFC regulator the Dubai Financial Services Authority said following an investigation it restricted the activities ACL is allowed to undertake, including stopping it from securing new clients and initiating new work, or transferring money to other entities such as AIM or other affiliates. “Given the onset of financial difficulties of the wider Abraaj Group, the DFSA has been closely monitoring the activities of ACL,” it said on August 16. “The DFSA has taken regulatory actions to safeguard the interests of investors and the DIFC.” It said it will continue to monitor ACL, which is the only UAE-incorporated division of Abraaj.