DUBAI: Air Arabia suffered a 609.5 million dirham ($166 million) loss in 2018 as it took impairments on its exposure to collapsed private equity firm Abraaj, knocking its shares on Thursday as analysts said its dividend could be hit.
The Dubai-based carrier, whose stock fell by more than 7 percent on the results, had posted a net profit of 630.6 million dirhams in the same period a year ago.
Air Arabia said it faced impairment charges of 1.13 billon dirhams, mainly due to exposure to Abraaj-related investments.
“While Air Arabia’s liquidity status and profitable operations remain intact, this step aims to serve the best interests of the company and its investors,” it said.
Dubai-based Abraaj was the largest buyout fund in the Middle East and North Africa until it collapsed last year in the aftermath of a row with investors, including the Gates Foundation, over a $1 billion health care fund.
“While we expected this to happen, this will affect Air Arabia’s ability to pay dividends,” said Nishit Lakhotia, head of research at Bahrain-based SICO.
“Further, this has affected its balance sheet and possibly will imply a higher rate for airline purchase or leasing.”
Air Arabia added 26 new routes to its global network in 2018 from its operating hubs in the United Arab Emirates, Morocco and Egypt, it said in a statement on its website.
The carrier took delivery of three new aircraft and ended the year with a fleet of 53 Airbus A320 aircraft operating to over 155 routes across the Middle East, Africa, Asia and Europe.
Abraaj’s liquidators are in the process of determining the value its assets to settle liabilities, said Air Arabia, which last month revealed that it has begun legal proceedings against Abraaj founder Arif Naqvi in Sharjah.
Abraaj exposure drags Air Arabia to a $166m 2018 loss
Abraaj exposure drags Air Arabia to a $166m 2018 loss
- Air Arabia said it faced impairment charges of 1.13 billon dirhams, mainly due to exposure to Abraaj-related investments
- Dubai-based Abraaj was the largest buyout fund in the Middle East and North Africa until it collapsed last year in the aftermath of a row with investors
Kuwait to boost Islamic finance with sukuk regulation
- The move supports sustainable financing and is part of Kuwait’s efforts to diversify its oil-dependent economy
RIYADH: Kuwait is planning to introduce legislation to regulate the issuance of sukuk, or Islamic bonds, both domestically and internationally, as part of efforts to support more sustainable financing for the oil-rich Gulf nation, Prime Minister Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah said on Wednesday.
Speaking at the World Governments Summit in Dubai, Al-Sabah highlighted that Kuwait is exploring a variety of debt instruments to diversify its economy. The country has been implementing fiscal reforms aimed at stimulating growth and controlling its budget deficit amid persistently low oil prices. Hydrocarbons continue to dominate Kuwait’s revenue stream, accounting for nearly 90 percent of government income in 2024.
The Gulf Cooperation Council’s debt capital market is projected to exceed $1.25 trillion by 2026, driven by project funding and government initiatives, representing a 13.6 percent expansion, according to Fitch Ratings.
The region is expected to remain one of the largest sources of US dollar-denominated debt and sukuk issuance among emerging markets. Fitch also noted that cross-sector economic diversification, refinancing needs, and deficit funding are key factors behind this growth.
“We are about to approve the first legislation regulating issuance of government sukuk locally and internationally, in accordance with Islamic laws,” Al-Sabah said.
“This enables us to deal with financial challenges flexibly and responsibly, and to plan for medium and long-term finances.”
Kuwait returned to global debt markets last year with strong results, raising $11.25 billion through a three-part bond sale — the country’s first US dollar issuance since 2017 — drawing substantial investor demand. In March, a new public debt law raised the borrowing ceiling to 30 billion dinars ($98 billion) from 10 billion dinars, enabling longer-term borrowing.
The Gulf’s debt capital markets, which totaled $1.1 trillion at the end of the third quarter of 2025, have evolved from primarily sovereign funding tools into increasingly sophisticated instruments serving governments, banks, and corporates alike. As diversification efforts accelerate and refinancing cycles intensify, regional issuers have become regular participants in global debt markets, reinforcing the GCC’s role in emerging-market capital flows.
In 2025, GCC countries accounted for 35 percent of all emerging-market US dollar debt issuance, excluding China, with growth in US dollar sukuk issuance notably outpacing conventional bonds. The region’s total outstanding debt capital markets grew more than 14 percent year on year, reaching $1.1 trillion.
