DUBAI (Reuters) - Travelex-owner Finablr (FINF.L) warned on Tuesday it was preparing for potential insolvency, while operations of its unit in the United Arab Emirates (UAE) was seized by the country’s central bank.
The developments are the latest setbacks for London-listed Finablr, which along with troubled UAE hospital operator NMC Health (NMC.L) was founded by Indian-born businessman BR Shetty.
The UAE’s central bank said late on Tuesday it has taken control of the operations of UAE Exchange, and its inspection team started examining the firm to verify its compliance with applicable laws and regulations.
The move came after UAE Exchange, which engages in money transfers and foreign exchange services, had suspended all new transactions at its more than 150 branches in the Gulf country.
Finablr, whose shares were suspended on Monday, had expressed doubts about its ability to continue as a going concern and said its chief executive would step down. It said on Tuesday it has engaged an accounting firm to undertake rapid contingency planning for a potential insolvency.
In another twist, a fund owned by Abu Dhabi state investor Mubadala took a 3.4% stake in Finablr, raising prospects of a potential bailout. Mubadala, which manages about $240 billion (198.6 billion pounds) in assets, confirmed the move, but declined to comment further.
Finablr’s troubles come after problems at its Travelex business, which was hit by a ransomware attack late last year. The company is also facing disruption to its business from the coronavirus crisis.
Finablr’s shares were temporarily suspended on Monday, following a steep slide in the company’s stock price due to uncertainty over founder Shetty’s financial holdings.
The shares have fallen by more than 90% this year.
Reporting by Saeed Azhar and Davide Barbuscia; Editing by Leslie Adler