A Kuwaiti creditor is refusing to agree to a debt settlement deal with Abraaj, which could push the private equity firm to seek provisional liquidation.
The refusal by Kuwait's Public Institution for Social Security (PIFSS) to join other creditors in a debt freeze may complicate Abraaj's efforts to sell its investment management unit to New York-based Cerberus Capital Management.
Two sources said Abraaj had started preparations for applying for provisional liquidation, a process in which a court appoints a liquidator on a provisional basis before hearing or ruling on a petition to wind up a company, reported Reuters.
The Kuwaiti fund has since notified Abraaj that it intended to continue a winding up petition it filed through the Cayman Islands last month. The next hearing in the process is scheduled for 29 June.
According to the newswire, Abraaj is focusing on concluding a standstill agreement with creditors, saying the vast majority of them backed the debt.