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Mon 19 Nov 2012 10:45 AM

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Goldman to buy warrants worth $40m in DSI

Deal with Drake & Scull comes week after Goldman helped arrange loan for MEP firm

Goldman to buy warrants worth $40m in DSI
Drake & Scull CEO Khaldoun Tabari.

Goldman Sachs bought warrants worth AED147m(US$40m) in Dubai's Drake & Scull International, less than a week after helping arrange a loan facility for the contracting firm.

Drake, which specialises in mechanical, engineering and plumbing operations, said the "strategic" investment would represent about 8.5 percent of the company's current market capitalisation.

The warrants mature in five years and can be exercised by Goldman any time after two years, Drake said in a statement on Monday, without revealing any pricing details.

Goldman's exposure will be settled in cash once the warrants are exercised, subject to pre-agreed maximum cash settlement amount.

The contractor, which reported a 93 percent drop in third-quarter profit on Sunday, had signed a US$120m equivalent loan facility to support its growth into other markets last week.

Goldman acted as a coordinator for the loan facility. Drake's shares fell 0.5 percent on the Dubai bourse in early trade following the announcement.

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