Dubai: Drake & Scull International (DSI), the Dubai-based project firm, is looking to a favourable verdict from the Court of Cassation to bring it back from the edge of going bankrupt.
In an update to its status, DSI said that the Court of Cassation issued a temporary stay on the earlier judgement issued by the Court of Appeal. A hearing has been set for March 14 to look into the merits of what Drake & Scull has to say.
Recent months had been particularly tiresome for the company as it sought a local court’s approval to initiate a restructuring process. But then multiple factors came into play that delayed taking this up.
“Commencing the restructuring procedures in accordance with the previous judgment will not enable the company to complete… in the required time,” DSI said in a statement. “And may require a longer period for the purposes of completing the procedures.”
Anything that extends the launch of a full-scale restructuring would mean higher costs, something that it could ill-afford to do so. DSI admits as much.
Draining cash by the day
“Since the company aims to complete the restructuring procedures at the least possible time and cost - given the difficult financial issues that the company is passing through - and the judicial executions' reservations that drain its cash day after day,” the company said.
“Since this matter will not be achieved except through the acceptance of the court to commence the restructuring procedures - in accordance with the circumstances of the emergency financial crisis and the acceptance of the previous procedures approved by the Financial Regulatory Committee - otherwise, the company will be bankrupted.”
Call to Court of Cassation
This prompted the submitting of a plea with the Court of Cassation.
DSI's take is that 'commencing the restructuring procedures in accordance with the previous judgment will not enable the company to complete the procedures in the required time. And may require a longer period for the purposes of completing the procedures'.
More time is what DSI doesn't have.
The company's problems came to light in 2018 when accumulated losses swelled to past Dh4 billion. Lots of discrepancies subsequently came to light, and saw multiple CEOs trying to correct the situation. Simultaneously, DSI - at one time a pre-eminent name in the local and regional construction sector - was holding protracted talks with banks and creditors to come up with a financial restructuring plan.
The matter then reached the courts, trying to find an outcome that will buy time and give the company a chance to meet most of its commitments.
DSI had even submitted a request to with the Court of Appral to 'suspend all judicial procedures and executions against the company which stipulated in the bankruptcy law. However, this request was rejected by the esteemed court as well'.
Now, the company awaits a judgement from the Court of Cassation.