DUBAI
Arabtec Holding, the Dubai-listed construction firm, said on Thursday that its recapitalisation programme will allow the company to pursue growth opportunities and fund completion of ongoing projects.
In a presentation posted to the Dubai Financial Market (DFM) website, Arabtec said that as part of the recapitalisation programme, the board of directors has been authorised to apply the company’s statutory reserve to offset any losses in 2017.
Arabtec had a statutory reserve of Dh148.2 million as of December 31, 2016. This was after the company in June 2016 got shareholder approval to pull Dh1 billion out of its statutory reserve to extinguish some of its losses.
Arabtec’s presentation on Thursday also said the recapitalisation programme will allow the company to meet its financial obligations and will support the management’s business plan.
The programme includes a Dh1.5 billion rights issue, which will be followed by a move to reduce capital through cancellation of up to 4.5 billion shares. It was announced in February 2017 as the contractor reported weak financial performance in 2016, with a net loss of Dh3.4 billion.
In a separate presentation posted earlier this week by Arabtec, the company’s chief executive, Hamish Tyrwhitt, said the recapitalisation programme will enable Arabtec to “capitalise on the positive long-term outlook for the construction sector in our key geographic markets.”
On Thursday, Arabtec’s share prices ended the day 2.39 per cent lower to reach Dh0.898.
The company will hold its annual general meeting on April 18 to get shareholder approval for the recapitalisation plan and to approve financial results for 2016.
