Dubai-based contractor Arabtec Holding has a current project backlog of AED18.1bn ($4.93bn) and it plans to grow it by at AED8bn-AED9bn annually at the group level.

The current backlog is 6 per cent down from AED19.3bn it had reported at the end of the financial year 2015, the firm – which is going through a recapitalisation programme – said in a presentation on the website of Dubai Financial Market (DFM), where its shares are traded. Arabtec, said it sees strong opportunities in the core market of UAE, which accounts for 67 per cent of its current project backlog.

Despite a slowdown in the construction sector, the new business it had secured in 2016 has risen 38 per cent to AED8.4bn, against AED6.1bn recorded at the end of 2015, according to its preliminary unaudited results.

Arabtec is conducting a strategic review of its current portfolio of investments and plans to dispose of non-core assets, it said in the presentation, adding that the company will recycle the capital to generate cash and sustainable returns on capital.

Arabtec Holding comprises three operating entities and nine investment companies, which includes its stakes in firms such as fit-out specialist Depa, Jordan Wood Industries, Arabtec Engineering Services and Gulf Steel Industries.

Arabtec aims to focus more at its home market and is becoming “increasingly selective” with projects in Saudi Arabia, the region’s biggest projects market, where the contractor had a made a major push to expand pre-oil price crash in 2014.

The company is facing “significant financial challenges” and required additional financial resources to fund the projects under execution, in “constrained liquidity” conditions.

The firm, which is seeking better relationship with lenders, received initial approval from the UAE’s market regulator, Commodities and Securities Authority, for its recapitalisation programme last month.

The proposed structure of the new plan is subject to the completion of Arabtec’s 2016 full-year audited financial results and a final approval from the market regulator, it said in 22 February statement to Dubai bourse. Arabtec will present the plan for a shareholders vote at the general assembly meeting scheduled to be held in April.

Arabtec, which was part of the joint venture that built the world’s tallest tower in Dubai, aggressively expanded its operations at home and abroad but ran into financial troubles in 2014 after its chief executive and the senior management departed. It was at the heart of a stock market slump and subsequently had to restructure its business to cut costs.

The company has reported a wider fourth-quarter loss on 13 February its board proposed an AED1.5bn rights issue to recapitalise the company. The company’s largest stakeholder Aabar Investment, an Abu Dhabi-controlled investment vehicle, is fully committed to subscribing to the rights issue.

With the rights issue, the price of which has yet to be determined, Arabtec’s paid-up capital will rise from current AED4.6bn to AED6.1bn. The company will subsequently reduce the capital through pro-rata cancellation of shares to cut the entire accumulated losses on the balance sheet, which at the end of last year stood at estimated AED4.6bn and included a loss of AED3.5bn recorded for the financial year 2016.

The losses last year were due to “impairment charges on high-risk items, recurring, non-recurring and operational expenses,” it said in a statement at that time.

According to 22 February bourse filing, based on the 2016 preliminary unaudited results, the capital reduction would be up to 4.5bn shares and key terms of the capitalisation programme will be finalised by the end of March.