UAE-Israeli partnership closes in on deal to buy Finablr

A business group linked to a former Israeli prime minister is close to finalising a deal to buy Finablr, the scandal-hit payments group that is majority-owned by Indian entrepreneur BR Shetty.

Ehud Olmert, Israeli prime minister from 2006-09, is non-executive chairman of Prism Advance Solutions, the London-registered company that was announced in October as a joint bidder with Abu Dhabi’s Royal Strategic Partners for Finablr’s assets including its foreign currency subsidiary UAE Exchange, said a person briefed on the deal.

Mr Olmert is involved in the transaction — touted as the biggest since the United Arab Emirates and Israel agreed to normalise relations in August — “on a daily basis”, calling senior officials in Abu Dhabi or Dubai, the person said. His involvement was intended to provide “some degree of trust that this is a serious business endeavour”, the person added. 

Royal Strategic Partners, which is run by corporate veteran Abubaker Al Khoori, is affiliated with Sheikh Hazza bin Zayed Al Nahyan, the deputy chairman of Abu Dhabi Executive Council and a brother of the de facto leader of the UAE.

The unit is a subsidiary of private investor Abu Dhabi Capital Group, which is owned by Sheikh Hazza and his immediate family, according to Diligencia, a UK-based corporate data provider.

Prism, whose London-based chief executive is Amir Nagammy, an Israeli of Arab origin, is expected to take a minority stake, with their Emirati partners having control of the rest. Guy Rothschild, a Switzerland-based financial consultant, is a co-founder and director of Prism, which was set up in November last year. 

In a statement, a Prism spokesman said Mr Olmert is non-executive chairman of Prism Advance Solutions but has no association with Prism Group AG, a Swiss vehicle through which the acquisition of Finablr is to be carried out.

Mr Olmert, who spent time in an Israeli prison after being convicted of accepting bribes, declined to comment. ADCG did not respond to a request for comment.

Ehud Olmert was Israel’s prime minister between 2006 and 2009 © Bryan R Smith/AFP/Getty

One person briefed on the negotiations portrayed Prism as “a white knight” seeking to solve problems for Finablr employees and lenders. Financial details have not been disclosed but the bid is approaching a conclusion and Prism is building a professional management team to run the company, said people briefed on the talks.

Shares in London-listed Finablr were suspended in March as it was dragged into a scandal surrounding NMC, the collapsed healthcare group founded by Mr Shetty.

It has since lost control of its foreign exchange business Travelex after reporting more than $1bn in undisclosed debts. Its UAE Exchange subsidiary, which made up a large chunk of the group’s income, was placed under the supervision of the UAE central bank in March.

Prism says it has institutional investor commitments, including from hedge funds and sovereign wealth funds from the US to the Gulf, to fund the transaction, according to one of the people briefed on the talks. The investors plan to work with lenders to repay creditors over time. 

“The deal is getting there, but the timeline is unclear,” said one adviser. “There is a lot of regulatory approval to get through.” Another said a share purchase agreement would be signed soon.

Both UK and UAE regulators would need to give their approval.

Bhairav Trivedi, chief executive of Finablr, declined to comment, citing the “confidential nature of this transaction”.

An Israeli banker described a “gold rush” of deals by Israel and the UAE in the past few months and questioned whether it was possible to “complete western levels of due diligence in such a short time”.

Mr Shetty has blamed the crises at Finablr and NMC, which has reported more than $4bn in undisclosed debts, on an alleged fraud perpetrated by various former executives.

Many staff have been unpaid for months since UAE Exchange faced a liquidity crunch in the spring. Advisers hope that new ownership will bring an injection of capital to help pay employees. 

Staff in India have also criticised local management for paying themselves bonuses ahead of other employees — a move that prompted an internal review in October.

Mr Shetty declined to comment.

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