Arabtec Holding announced on Thursday that it has officially filed for liquidation following a board meeting earlier this week.
In a filing to Dubai Financial Market, Antoine Abi Rached, group general counsel and company secretary, said the company and some of its subsidiaries “have filed for insolvent liquidation pursuant to the resolutions of the shareholders of the Company passed at the general assembly meetings held on September 30 and November 30”.
Owing to inter-dependencies of certain of the company’s subsidiaries, the application will include subsidiaries Arabtec Construction, Arabtec Constructions, Austrian Arabian Readymix Concrete Co and Arabtec Precast, the company said last month.
The announcement comes two days after Arabtec’s board of directors met to work on the application to liquidate the company.
Scott Livermore (pictured below), ICAEW economic advisor and chief economist at Oxford Economics, said: “I think the important thing to look at is clearly there is excess supply and excess capacity in the construction industry and that was a problem pre-Covid. Covid has exacerbated it and highlighted the challenges more.
“But when the economy comes back, there’s still going to be over-capacity, over-supply in the construction sector. I think policy will be geared towards tackling that. With the committees that were established about a year ago, I think they had that in mind. And I think you will see some rationalisation, consolidation.
“Whether that means Arabtec will liquidate or have a different solution to it, I think it’s quite hard to say. But the sector needs to scale back to be sustainable in order to put a floor under real estate prices.”
Arabtec Holding said last month that it was to file an application for its insolvent liquidation at the competent courts “at the earliest opportunity”.
In accordance with the resolution of the company’s shareholders at the general assembly meeting held on September 30, the conclusion was reached following a two-month period of discussions with key stakeholders.
The decision was taken at a general assembly meeting held on November 30 despite a group of shareholders making a last-ditch attempt to save the construction giant from liquidation.
The impact of the liquidation of Arabtec is expected to send “reverberations” throughout the industry, with the repercussions felt on a much wider scale than simply those who are directly involved with the company and its current pipeline of projects, analysts told Arabian Business at the time of the initial announcement.
Arabtec Holding was valued at about AED30 billion ($8.17 billion) at its peak in 2014 and is now worth AED795 million ($216.5 million), with the stock down 60 percent this year alone. Shares on Dubai Financial Market have been suspended since the initial announcement by the company.
Follow us on
