Trading on Arabtec shares continued to be strong this morning, providing the current board with positive news after yesterday’s press conference in Abu Dhabi, which moved to calm the market after a recent plunge in the Dubai contractor's value.
The share price rose by nearly 10 percent at 12:30, pushing the overall Dubai bourse up by 1.55 percent.
In early June, wealthy Abu Dhabi state fund Aabar Investments cut its stake in Arabtec to 18.94 percent from 21.57 percent, raising doubts over its willingness to support the company. Then on June 18, CEO Hasan Ismaik, who had built a 28.85 percent stake in Arabtec, abruptly resigned.
Arabtec shares plunged 70 percent from a record peak in mid-May.
In a bid to quell fears, chairman of Arabtec, Khadem Al Qubaisi, yesterday told reporters that the company is in the middle of a restructuring phase, which he claimed has led to an increase in productivity and job cuts.
“We did the whole restructuring in 10 or 12 days. After we started to review the whole company, we terminated some contracts, but there is no effect, and the management is still able to run the business.
“Actually, productivity increased and efficiency increased. I can assure you that if there is any fat, I will remove it in the next few weeks; I will not keep this fat.
“My job is to improve the productivity and the efficiency, but we are capable as management of doing that.”
As part of the restructuring of the company, he said Arabtec would refocus on its core business of construction.
“For Arabtec, we are now in restructuring and we need to focus on the core business, which is construction.
“This is our business – Arabtec as a construction company not as an oil and gas, and this is why the message to the public is that the focus will continue to be the core business of construction.
“No harm to add a few sectors here and there, but we need to improve the construction company and improve the productivity and the infrastructure of the company.”
Flanked by fellow board members, including the new acting CEO Mohamed Al Fahim, Al Qubaisi said there would be no cancellation of any of Arabtec’s multi-billion dollar projects, described the $40bn project to build houses in Egypt as a collaboration between the UAE and Egypt.
“Egypt is not a project; it is a strategic project between the two countries, between the UAE and Egypt, and for us it’s a very, very important project and I can assure you that we are almost in the design phase, and we are going ahead with his project.
“Soon you will see good news regarding Egypt. I think it’s a great strategic project for us.”