Chairman departure means more uncertainty for Arabtec

19 April 2015

Khadem al-Qubaisi will leave the construction company after not being nominated for the board

  • Khadem al-Qubaisi and Riad Kamal not nominated for the company board
  • Company made losses in fourth quarter of 2014
  • Share price has plunged since May 2014

Dubai-listed construction firm Arabtec Holding is facing further uncertainty in 2015, as the company’s chairman Khadem al-Qubaisi was not included on a list of board nominees on 15 April. The company’s founder Riad Kamal was also not included on the list.

Al-Qubaisi, is managing director of Abu Dhabi investment vehicle International Petroleum Investment Company (Ipic) and the chairman of Aabar Investments, of which Ipic owns more than 98 per cent. Aabar is a major shareholder in Arabtec, with, acording to its website, a 34.9 per cent stake in the company.

The list of nominees for the board are:

  • Mohamed Ayman Jalal el-Dine
  • Khalid Ahmed Abdulla al-Mheiri
  • Mohammed Abdulla Ahmed Said al-Suwaidi
  • Mohamed Ahmad Mohamed al-Yamahi
  • Mohamed Ali Ismaeli Ali al-Fahim
  • Yazzan (Mohamed Ali) Abdul Hafiz Hatamieh
  • Mohamed Shukri Mohamed Ghanem
  • Iyad Ihssan Mohamed Abdulrahim
  • Khalifa Hamad Obaid Hamad al-Mheiri
  • Mohamed Hamad Ghanem al-Mehairi
  • Wassel Issa Ayoub al-Fakhoury
  • Mohamed Ahmed Badawi al-Husseiny
  • Abdulla Salem Abdulla Mohamed al-Ameri
  • Chad Tappendorf
  • Tareq Ahmad Ramadan Abu Shreehah
  • Andrew Livingston

The current board is:

  • Khadem al-Qubaisi – chairman
  • Mohamed Ali al-Fahim – board member
  • Riad Kamal – board member
  • Mohamed Hamad al-Mehairi – board member
  • Mohamed Abdulla al-Suwaidi – board member
  • Khalifa Hamad al-Mehairi – board member
  • Wassel Issa al-Fakhoury board member

The upcoming board change is the latest move in a long list of corporate shuffling at the company. Most recently, Raja Ghanma was appointed as CEO of Arabtec Construction in late March. Ghanma previously served as the firm’s chief operating officer (COO) and has been with Arabtec since 1995.

The CEO position has changed several times in recent years. On 18 June 2014, the company’s CEO, Hasan Abdullah Ismaik, resigned as Arabtec’s share price fell from a high of AED9.9 ($2.7) on 7 May to close at AED4.4 on 17 June.

Ismaik had been driving forward an ambitious strategy that aimed to turn Arabtec into one of the 10 largest construction companies in the world by 2018. The plan was to do this through inking multibillion-dollar construction agreements; forming joint ventures that would take the firm into new sectors, such as oil and gas, and heavy infrastructure; taking complete ownership of subsidiaries; and targeting companies for acquisition.

Following Ismaik’s departure, much of this strategy appears to have been abandoned and the company has retrenched senior executives and a limited number of staff to boost productivity and reduce costs as the company made a loss of AED94.4m ($25.7m) in the fourth quarter of last year.

The company’s share price collapsed from a high of AED7.4 in May last year to AED2.6 in July last year, Since then it rebounded slightly to about AED4 in late last year. The price on 19 April was AED2.9.

Instead the focus has shifted to delivery. According to regional projects tracker MEED Projects, Arabtec is working on more than $11bn of projects in the Middle East, although some of these contracts are being executed with joint venture partners.

Arabtec projects in Middle East
ProjectCountryContract value ($m)Main contractors
Bahrain Bay HQBahrain60Arabtec Construction
St Regis AmmanJordan197Arabtec Construction
Bab Bahr and ManaraJordan80CCC / Drake & Scull / Arabtec
Westin AqabaJordan110CCC / Drake & Scull / Arabtec
Red Sea AstrariumJordan1,550Arabtec Construction
Jumeirah Al-Qala’a and Qasr Al-AqabaJordan350CCC / Drake & Scull / Arabtec
Sabah al-Salem UniversityKuwait429Arabtec / Combined Group
Twin Towers DohaQatar190Arabtec Construction
Msheireb Phase 2Qatar631Arabtec Construction
Msheireb Phase 2 Boutique HotelQatar70Arabtec Construction
Al-Waab City Phase 3Qatar50Arabtec Construction
Al-Waab City Phase 4Qatar50Arabtec Construction
380 Aramco VillasSaudi Arabia283Arabtec Construction
Al-Ain HospitalUAE1,170Arabtec / San Jose
Fairmont Hotel Abu DhabiUAE270Arabtec Construction
Midfield Terminal BuildingUAE2,960Arabtec / TAV/CCC
Louvre- Abu DhabiUAE653Arabtec / San Jose / Oger
Maysan TowersUAE120Arabtec Construction
Reem Island MosqueUAE8Arabtec Construction
Najmat Abu DhabiUAE81Arabtec Construction
Views SarayaUAE170Arabtec Construction
Dubai International Airport Terminal 2UAE153Arabtec Construction
Palazzo Versace HotelUAE626Arabtec Construction
Sanctuary FallsUAE112Arabtec Construction
Damac HeightsUAE150Arabtec Construction
P-17 TowerUAE193Arabtec Construction
Barsha DrainageUAE15Arabtec Construction
Lillian TowerUAE221Arabtec Construction
Palma VillasUAE46Arabtec Construction
Tiara HotelUAE53Arabtec Construction
Mira CommunityUAE338Arabtec Construction
Total 11,389 
Source: MEED Projects

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