First Abu Dhabi Bank has US$73.2m exposure to fallen agri-trader Phoenix

[DUBAI] First Abu Dhabi Bank (FAB), the United Arab Emirates' (UAE) largest lender, on Wednesday said it has US$73.2 million of exposure to agri-trader Phoenix Commodities and related entities.

This was the biggest exposure so far disclosed by a UAE lender to the group that has entered liquidation after amassing more than US$400 million in potential trading losses, according a document prepared by the liquidators and seen by Reuters.

Emirates NBD, Dubai's largest bank, said on Tuesday that it had US$23.66 million in exposure to Phoenix Commodities, which had offices in Dubai and Singapore.

FAB's exposure consists of US$7.7 million to Phoenix Commodities as part of a syndicated loan with other banks, the lender said in a bourse filing. It also gave US$55.3 million in bilateral and syndicated loans to related entities Phoenix Global DMCC and SMEG DMCC. FAB has a further US$10.2 million in exposure to SMEG DMCC as bilateral loans.

"The syndicated facilities are secured by a combination of security, which includes accounts pledges, assignments and corporate guarantees. The bilateral facilities to the related companies are secured by corporate guarantees and some of them by cash margins," FAB said in the filing.

Shares in FAB were trading 4.5 per cent down in early trade, underperforming a 2 per cent fall for the Abu Dhabi stock index.

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Sources familiar with the company had told Reuters that Standard Chartered was one the banks that extended financing to the group. Standard Chartered has declined to comment on the size of its exposure.

Standard Chartered was among lenders that helped Phoenix to raise a US$205 million loan in late 2017. FAB was among the lenders in that deal.

REUTERS