Marka liquidation vote invalid, shareholders to meet again

Shareholders representing 10% of share capital in struggling Dubai retailer Marka have rejected a decision by the majority of shareholders (90%) taken last week to dissolve and liquidate the company following several failed attempts at recovering finances.

The majority of investors had approved the motion at the company’s general assembly meeting, according to a regulatory filing. However, a statement on the Dubai Financial Market (DFM), where Marka is listed, said the remaining shareholders will vote again on either the continuity of the company or its liquidation.

Marka has refused to comment on the vote, but the statement said its general assembly will be given a restructuring plan ahead of the next vote.

In case of non-approval of company continuity under a special resolution, “the liquidation of the company shall be considered,” the statement said.

The company, which was the first retailer to list on the DFM in 2014, saw its share price drop 90 percent last year due to consecutive quarterly losses. It then had its shares suspended in April 2018 by the Securities and Commodities Authority (SCA).

It began restructuring in 2017 by selling stores and cutting operational costs, before approving plans in November 2018 to reduce its capital by $122.5m (AED450m).

In the first quarter of 2019, however, it had expanded losses by 21.8 percent at $80.5 million (AED295.8 million) compared to $66m in the same period last year.

The company said in a filing to DFM that it saw its revenue for Q1 this year drop 23 percent to $21m, despite having announced a total profit of $1.5m for the first nine months of 2018.

Marka operates brands including Lebanese restaurant chain Reem Al Bawadi, Italian ice cream café Morelli’s Gelato, Italian street food restaurant Vicolo and jewellery brand Dinh Van.