Dubai construction firm Drake & Scull has sold its share in the One Palm development in Dubai to its joint venture partner Omniyat Properties.
The property, located on the left trunk of Palm Jumeirah, was launched in 2014 and is scheduled for completion next year.
When completed, the development will include 90 ultra-luxurious apartments with prices starting at $3.8 million (AED14m) and rising to $54 million (AED200m) for a penthouse.
Following the announcement of another quarterly loss last month, Drake & Scull announced a turnaround and capital restructuring plan. Like its peers in the region, the construction firm has been hit hard by tough competition in the sector and an economic slowdown caused by low oil prices.
The company said the turnaround plan included among other measures capital raising, divesting non-performing or distressed subsidiaries and the disposal of non-core assets as well as cost-cutting measures.
In a statement today, Drake & Scull said the joint venture partners agreed to a provisional settlement plan comprising of consecutive phases that is scheduled to be completed in 2017 which will generate liquidity of over AED 300 million ($82m) for Drake & Scull.
The first phase of the settlement plan is approved and the proceeds of the payment will be remitted in March 2017, the statement added.
Progress updates on the residual phases will be further announced by the joint venture partners upon finalisation throughout the fiscal year.
“This transaction marks an important milestone in the DSI (Drake & Scull) turnaround and capital restructuring plan that was initiated in Q4 2016,” the company said.
“The company is progressing steadily with its divestment program and will continue to pursue the disposal and monetisation of its non-core assets and non-performing subsidiaries to generate cash for the business.”
The company announced earlier in February 2017 several strategic measures to stabilise the business in preparation for a new phase of financial and operational recovery.
The Drake & Scull Annual General Meeting of the shareholders is scheduled to convene during the month of April 2017 to approve these measures.
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