CEO Hamish Tyrwhitt, who said business continued to grow during the quarter
Dubai contractor Arabtec reported a wider fourth-quarter loss on Monday, and its board said it was seeking shareholder approval for a 1.5 billion dirhams ($408.4 million) rights issue to recapitalise the company.
Shares of Arabtec plummeted almost 10 percent at the open after the results were disclosed to the market.
The builder is working with boutique investment bank Moelis to study options for the company's capital structure, sources familiar with the matter told Reuters on Sunday.
Arabtec made a net loss of 2.95 billion dirhams ($803.4 million) in the three months to Dec. 31, Reuters calculated based on financial statements in lieu of a quarterly breakdown.
This compares with a net loss of 403.74 million dirhams in the corresponding period of 2015, according to Reuters' calculations of Arabtec's audited financial statements.
EFG Hermes had forecast Arabtec would make a quarterly net loss of 272.8 million dirhams.
The company reported a net loss attributable to the shareholders of its parent of 3.41 billion dirhams for the year 2016, compared with a loss of 2.35 billion the year earlier.
The company also said its board approved a proposed capital restructuring plan and a 1.5 billion dirhams rights issue, which would require investor consent at the next general meeting.
Arabtec has been struggling for more than two years because of a sagging construction market, as well as internal strife among shareholders and a number of senior management changes.
Arabtec appointed a new management team late last year, headed up by group CEO Hamish Tyrwhitt, who said business continued to grow during the quarter.
“The group had a number of significant challenges in 2016, however the underlying strength of the business enabled our revenue to keep growing while measures were introduced to contain costs,” said Tyrwhitt.
Mohamed Thani Al Rumaithi, chairman of Arabtec Holding, added: “Our board is taking confident, sensible steps to underpin the company’s capital structure as we look ahead to a robust pipeline of business in the years ahead. Aabar Investments PJS’s commitment to the Rights Offering represents a strong vote of confidence from our largest shareholder in the long-term future of Arabtec.”