UAE-based Paramount ADGM (Abu Dhabi Global Market) has filed for Chapter 11 bankruptcy protection in Delaware, United States, over a dispute initiated by a Middle Eastern defence company. Global aerospace and defence company Paramount has operations worldwide, but operations in South Africa and elsewhere will not be affected, the company has said.
Bloomberg reported that the company filed for bankruptcy on Thursday 15 August, listing assets of between $500 million and $1 billion and liabilities of between $100 million and $500 million.
Chapter 11 bankruptcy allows a company to keep operating while it works out a plan to repay creditors. It appears the Chapter 11 filing relates to a solvent debt restructuring process.
Paramount Group Limited, a non-operating company licensed in the Abu Dhabi Global Market (ADGM) in the United Arab Emirates, said in a statement on Thursday that a limited number of its non-operating entities voluntarily filed for Chapter 11 protection in the United States after an arbitration award issued in August 2024, stemming from a dispute initiated by an unnamed Middle Eastern company in 2022.
“The company believes the outcome of the arbitration to be incorrect, but the arbitration process means that the decision cannot be appealed. Additionally, Paramount was not permitted to pursue its counterclaims against the Middle Eastern company during the arbitration. These claims far exceed the amount awarded and can now be actively and aggressively pursued,” the company said in a statement.
“Paramount’s shareholders and management believe that the value of Paramount ADGM is significantly higher than the arbitration award. The decision to file for Chapter 11 is a critical step in protecting the substantial goodwill and value of Paramount, while allowing the company to pursue its legitimate claims against the Middle Eastern company in the US Federal Courts,” Paramount added.
It said the Chapter 11 filing in the United States will not in any way impact other Paramount operations around the world, including South Africa. “Paramount remains fully committed to its customers, vendors, and employees. Business will continue as usual, with all projects and services proceeding without interruption.”
The aerospace and defence company said relationships with its global vendors remain robust, and payments for goods and services from the operating entities outside of Chapter 11 will continue as normal. The company’s employees, recognised as its greatest asset, will experience no changes to their jobs, salaries, or benefits during this process, it said.
South African company ADG Mobility (‘ADGM’), part of the OTT Group of Companies, has clarified that it is not associated with Paramount. According to Dr Stefan Nell, Group Managing Director of the OTT Group of Companies and co-founder and CEO of ADG Mobility, ADGM has no association whatsoever with Paramount and did not file for bankruptcy. The term ADGM refers to ‘Abu Dhabi Global Market’ Free Zone where Paramount is located in the UAE, he stated.
