Tabarak Investment, a UAE-based firm which is injecting AED500m ($136m) in fresh equity into Drake & Scull, has bought the former chief executive Khaloun Tabari’s shares in the contracting firm.

Tabarak has acquired “a tranche” of shares held by Tabari”, the company confirmed in a statement to Dubai Financial Market (DFM) where its shares are traded. The transaction, it said, was indicated in the daily trading report and the shareholders composition of the DSi will be updated on the bourse website upon the completion of the clearing and settlement procedures of the deal, the DSI said, without the giving the exact percentage of the shares sold.

Reports earlier suggested Tabari has sold his estimated 12-to-14 per cent shareholding in the company to Tabarak, which has become the single largest stakeholder in the contracting firm with up to 20 per cent stake. However, the data updated on the DFM website on 12 June showed that Tabari owned 8.3 per cent of the company. The bourse did not mention Tabarak shareholding.

DSI has struggled to maintain profitability in recent times on the back of a region-wide slowdown in the construction activity as the governments cut spending to compensate for revenues on the back of the weaker oil prices. DSI operates in a number of GCC markets including Qatar and Saudi Arabia. The company on 16 May said it has recorded net loss of AED722m for the first three months of 2017 “due to the provisions and impairment charges undertaken in the first quarter.”

Although, the firm said it has an order backlog AED7.3bn, it is pressing ahead with the capital restructuring program, first phase of which entails reduction in the company’s share capital to write off the accumulated losses. The company then intends to increase capital by AED500m, which will be subscribed by Tabarak, a move, which DSI has said was “critical and strategic’ to address the liquidity challenges.

“Tabarak Investment is a strategic investor that is not just coming in with money, but also an understanding of business in the UAE and the ability to help us win a greater share of the market within the UAE,” DSI CEO Wael Allan told MEED in an exclusive interview in April this year. “They have great expertise in restructuring and helping companies that are in distress, so I think that expertise and knowledge will also speed up our recovery.”

Earlier this year MEED reported that the company is planning on selling its AED300m ($81m) stake in the One Palm development in Dubai, to generate much needed cash.