After 5 years, Drake & Scull finally makes it back to DFM
Dubai engineering firm makes successful comeback after enduring extended rough ride
Dubai: It's been more than 5 years, but the Dubai construction firm Drake & Scull has finally made it back to the DFM.
The stock is trading at Dh0.315 in the opening minutes, with heavy trading backing it. The volumes were at 81 million in the first 5 minutes itself, and the stock price represents a 27 per cent spike from the last time the stock was traded - which was in November 2018.
Boosted by a fairly well-received rights issue, which brought in some timely new funds, the company's stock opened for trade along with other listed entities on the Dubai stock exchange at 10am. It was November 2018 that the stock was taken off after successive failures on full financial disclosure.
“This step comes after the subscription process for the shares of Drake & Scull International PJSC, which began on April 25 and ended on May 10, achieved a great success," said Shafiq Abdelhamid, Chairman, in a statement earlier this week.
The proceeds for the increase in capital exceeded Dh450 million, whereby the 'company was able to cover the minimum amount of targeted capital'.
A comeback story
The last 5 years and some have been grueling for Drake & Scull, not least of which is the Dh4 billion plus in accumulated losses, and the fact that it owes sizeable amounts to its lenders and creditors. At various points, it had been on the edge of liquidation, something that had befallen the other major UAE contractor, Arabtec.
Late last year, Drake & Scull finally pulled through, with the local court allowing the company's current owners to script a turnaround and bring to their side all those money is owed. The restructuring plan was subsequently approved and that was followed by the rights issue. More reworking of the capital base is expected.
The company will be hoping to win new contracts, locally and in the region, which should go some way towards easing its cash flow situation. In the recent past, projects had been won, and which should help it pitch for more.
For today, however, Drake & Scull will be feeling the glow of its return to the DFM. And a decent start to its traded numbers.