Arabtec – rebuilding a giant?

Khadem Al Qubaisi sought to strike a confident and somewhat defiant poise says Neil Halligan

Khadem Al Qubaisi struck a confident and somewhat defiant poise as he spoke to journalists on the 12th floor of the IPIC headquarters in Abu Dhabi on Wednesday afternoon last week.

Backdrops with Arabtec’s famed red logo stood behind the long table of five board members of the embattled construction company, but only one man spoke.

Facing a barrage of questions, Al Qubaisi probably gave what some investors were looking for – stability and a positive outlook that will restore confidence.

While journalists didn’t get a headline-grabbing story, what they did see was Al Qubaisi deliver the solid message that Arabtec was in safe hands (backed up by support from Aabar).

There was also a promise that good times are ahead, once they have “trimmed the fat” and refocused the company on its core business of construction. 

“We terminated the right people” was how he put it and the stark term was one that stood out during the 45-minute press conference.

These are changed times at Arabtec.

Al Qubaisi delivered a number of key messages, many of them in response to rumours that had circulated the past two months, which ultimately led to a 65 percent collapse in the value of the share price.

First, he said there would be no cancellation of projects and no deviation from their current plan.

Secondly, that the company has been restructured, a strategy that was completed during a “10 to 12 day” process.

While Al Qubaisi didn’t go into numbers or names of how many or who they got rid of (reported to be 150 high earners), he did say the current management have already improved the company’s productivity and efficiency. 

“I think this change is a healthy change for company,” he said, clearly distancing the restructured Arabtec from the previous regime, led by ex-CEO Hasan Ismaik. 

Al Qubaisi categorically denied any impropriety or corruption and stressed the importance he placed on transparency.

“I can assure you that the transparency will improve in Arabtec in the next few months, because we will not accept [anything else].”

His words, sentiment and message were continually pointing towards the future, towards what he sees as a brighter future for the company.

Investors appeared to give their thumbs up to his positive message, with the share price rising by 6 percent on Thursday.

It remains to be seen, however, how this confidence plays out in the weeks and months to come, but if Al Qubaisi can match his words with more positive announcements and better corporate governance in the very near future then Arabtec might, finally, be heading back in the right direction.

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