Arabtec plans rights issue, bond sale to raise $150m

Arabtec Holding, the UAE’s largest builder by market value, on Tuesday said it plans a rights issue and to raise $150m through the sale of five-year convertible bonds.

The company plans to sell 398.67 million shares to existing shareholders at one dirham a share, it said in a statement to the Dubai bourse.

Investors will be offered a new share for every three they hold, it said.

Arabtec will use the funding to “support the company’s expansion plans to the new markets and increase its working capital,” it said.

Arabtec, which is bidding for $8.17bn of work outside its local markets, reported a 96 percent decline in third quarter net profit to $1.85m, hit by project cancellations in the Dubai market.

Half of all real estate projects in Dubai were cancelled in the wake of the financial crisis, the government has said, forcing local construction firms to diversify into new markets. 

Riad Kamal, the CEO of Arabtec Holding, was last week barred from trading in UAE stocks for six months by the country’s regulator, over trades sold in May ahead of the announcement of project wins.