Drake & Scull secures offer from strategic investor

14 February 2017

Binding offer will inject AED500m into the Dubai-based contractor

Dubai-based contractor Drake & Scull International (DSI) has secured a binding offer from a UAE strategic investor to inject AED500m ($136m) into the company.

The UAE’s Tabarak Investment has made the offer, which is subject to the approval of DSI’s shareholders and the Emirates Securities and Commodities Authority (SCA).

The offer is part of the company’s turnaround and capital restructuring plan, which also involves obtaining approval from the SCA for a 50 per cent capital reduction.

The proposed capital reduction involves cancelling shares on a pro-rata basis at a ratio of 2:1 and applies to all DSI shareholders. An Annual General Meeting of the shareholders in April will vote to approve the capital restructuring plan.

For its 2016 preliminary un-audited annual results the company reported a net loss of AED787m, compared to a net loss of AED939m for fiscal 2015. Revenue was AED3.2bn for the year, compared to AED4.2bn for 2015.

The companies says that cost overruns and revenue reversals on disputed legacy projects primarily in the civil sector and in Saudi Arabia impacted the results.

The company is working with PwC on its turnaround strategy.

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