By Parag Deulgaonkar
Company expects to complete capital reduction by end of Q3, says Allan
Dubai-based contractor Drake & Scull International (DSI) will invest the $136.24 million (AED500 million) capital injection “wisely” to win profitable projects, the company CEO said on Sunday.
The Dubai Financial Market-listed company is hoping to complete it capital reduction plan by 75 percent by end of the third quarter, pushing back the process by one month.
Phase one (capital reduction) of the capital restructuring programme is expected to be completed within six to seven weeks. The phase two (capital increase) will be initiated thereafter, which includes AED500m capital injection by Tabarak Investment, which has now become company’s largest shareholder.
Tabarak acquired the majority shares of former CEO Khaldoun Tabari, and currently owns between 30 and 40 percent of DSI, according to Ahmad Kilani, CEO Tabarak Investment.
“We want to invest money [AED500m] in projects that will turn value to us and our clients. Our intention and our plan is to spend the money on projects that we can complete and generate more cash and profit,” said DSI CEO Wael Allan.
While he confirmed that it is business as usual for its Qatar subsidiary, the company is not bidding for any new projects, in line with all the official guidelines from the UAE government.
Feras Kalthoun, acting chief financial officer, DSI, said the completion of the capital restructuring programme was vital to resolve the liquidity challenges and rebalance its capital structure.
“Our immediate priority is to plug-in our working capital deficit; improve collection to shore-up liquidity. Our short-term goals are to streamline our business, bolster liquidity, optimise governance and transparency, and secure high-potential projects," Kalthoun said.
“The UAE market remains buoyant and we expect to progress steadily with our turnaround strategy throughout the second half of the year,” he added.