Sources say Dubai-based tech firm will submit a proposal to creditor banks on how to restructure debt
Pacific Controls, a Dubai-based technology company, will submit a proposal to creditor banks on how to restructure its 1.4 billion dirhams ($381 million) of debt by the end of October, sources told Reuters on Thursday.
The company began talks with banks during the summer after hitting problems with its repayments, partly due to delays in payment from some clients as the United Arab Emirates' economy has stumbled over falling oil prices.
Recently appointed chief executive Sanjay Nayak has held talks with the company's clients to get assurances on continuation of payments and contracts, according to two banking sources who spoke on condition of anonymity.
The privately-owned company, which launched in 2000, counts a number of state institutions as customers including Dubai Civil Defence and the Roads and Transport Authority, as well as government-controlled companies such as telecoms firm Etisalat, banks, hospitals and schools.
Pacific Controls declined to comment, but in a statement in July said it was confident of a turnaround.
Negotiations with the banks are being handled through a newly-formed creditor committee made up of seven international and local banks, led by National Bank of Fujairah, two banking sources said.
The committee represents 19 banks, some of whom are part of a 1 billion syndicated loan and others who have lent to the company directly.
Pacific Controls is being advised by KPMG, while the banks have yet to appoint an adviser.
Any deal is likely to involve extending maturities to better align them with the company's cashflow projections, said the first banking source.
A source told Reuters in July that the company had used short-term loans to fund long-term capital expenditure projects. With revenue yet to accrue from these schemes, its cashflow position was then compounded by disruption from delayed payments.
The negotiations are being assisted by a special mechanism set up by the UAE Banks Federation in March to help reach an agreement with the company and mediate between the short and long-term lenders.
The scheme, which was introduced in the absence of an effective insolvency law, has assisted more than 1,700 SMEs and larger companies, covering around 7 billion dirhams of outstanding loans, the federation said this week.
First ask them to pay the dues of the people who have either left the company or were asked to leave. Till date many of our End of service is pending.
Even salaries of existing employees are now due, most probably minimum of two months.
Whenever asked about when our dues will be provided, the CEO cuts a sorry figure that he cannot commit a date. The so called top management is absconding since May. This company can't be believed.
We are filing a case against this fraud company
These type of news of bail out is going on since long. Cant be believed anymore looking into the current situation
They never paid gratuity even when they had money
I don't think that after so much scandal and negativity in the media (rightfully so) this company will ever be back on its feet and it shouldn't....they should be a lesson to the other over-ambitious local companies out there!