The UAE-Israel consortium that acquired the debt-laden payments firm, Finablr, is closing in on a potential merger with Bahraini foreign exchange firm BFC Group Holdings, the consortium stated on Wednesday.
This deal would create the largest remittance services and currency exchange group in the MENA region said Prism Group AG and Abu Dhabi’s Royal Strategic Partners who had formed the consortium in December 2020 to acquire Finablr. The London-listed payments firm Finablr owned UAE Exchange, one of the largest foreign currency firms in the country.
Key facts
- The talks of a merger with the century-old BFC Group Holdings are at an “advanced stage” and the deal is expected to be closed by the second quarter of 2021, the consortium stated.
- The merger would also be subject to regulatory approvals in India, Bahrain, and Kuwait.
- This deal would see the merging of two of the largest remittance service companies in the region with more than 24 million customers in 30 countries.
- The consortium also stated that it intended to invest in a “digital transformation plan” and become the first omnichannel financial services company in the region.
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Key background
In April 2019, Finablr reported that it had hidden $1 billion in debt from the board, a month before its IPO at an estimated value of $1.59 billion.
By March, the company was preparing for insolvency, leading the central bank to take over, overseeing operations of UAE Exchange.
The consortium paid a nominal sum of $1 for the acquisition of the embattled Finablr, but it might eventually have to fork out as much as $190 million if it succeeds in recovering funds from third parties that relate to the fraud, according to Bloomberg.
This deal was viewed as the first significant commercial transactions between UAE and Israel, after the nations normalized relations in September 2020.
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By Ayesha Venkataraman, Februry 24, 2021, published on Forbes Middle East Staff
