Dubai: Drake & Scull International (DSI) has completed the sale of a majority stake to Tabarak Investments, helping it to settle its Dh1 billion debt, the company announced on Monday.
In the same statement, DSI announced that it had terminated its chief executive, Wael Allan, without naming his replacement.
Tabarak Investments have agreed to lend the construction company Dh100 million, interest-free, as part of the deal. DSI is currently undertaking a capital restructuring programme, which is set to be completed by the third quarter of 2017.
In line with this programme, the contractor is currently in talks with banks to extend new credit facilities, according to the statement, in order to “improve liquidity.”
Reporting its quarterly results, DSI recorded a net loss of Dh199 million in the second quarter of the year, a marginal improvement on the company’s last year second quarter net loss of Dh207 million, largely due to project cancellations and provisions taken amid a challenging business environment.
In a statement, Mohammad Atatreh, a board member at DSI, said: “[This year] will continue to be a transitional year for DSI as we proceed with the execution of our turnaround plan. Our efforts to streamline our operations and restore our financial position will enable us to set solid foundation for sustainable growth.”
In February 2017, the company announced several strategic measures to stabilise the business in preparation for a new phase of financial & operational recovery.
It was also reported in the same disclosure that DSI’s board of directors had accepted the resignation of ex-CEO and ex-Vice-Chairman Khaldoun Tabari.
DSI has suffered a torrid couple of years, reporting in August 2016 a year on year decline of 23 per cent in revenue, which stood at Dh1.83 billion in the first half of 2016, compared to Dh2.39 billion in the same period in 2015.
The fall in revenue was due to the significant contraction and prolonged volatility in the regional construction sector, the slow progress on ongoing projects, a decline in new project awards and adjustments across key markets in the GCC.
DSI also blamed project delays and project cancellations in Saudi Arabia for causing the majority of its provisions.
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