Dubai: The Dubai-based Drake & Scull International’s turnaround efforts have received an official boost.
The engineering services firm has been “accepted” by the Financial Reorganisation Committee, which would help its cause in hammering out a new set of repayment terms with its creditors, Drake & Scull said in a statement issued to DFM.
“The FRC was established to supervise the management of financial restructuring procedures of organisations to facilitate a consensual agreement between the debtor and its creditors,” the company said in a statement. This process will now be helped by “one or more experts appointed by the FRC for this purpose.”
Drake & Scull had been in talks with its lenders since the second-half of 2019 to ease its payback load. The company had run up losses of Dh5 billion plus, much of which only showed up on its books last year. Investigations are on to trace how the funds went missing/used up, and complaints have been filed against members of the previous management.
“If with FRC’s blessings, Drake & Scull is allowed to enter into some sort of debt payment holiday, it could be decisive in winning itself a turnaround,” said a construction industry source. “Operationally, the company still has its strengths – that will eventually show up on the financials. But it will need time.”
Drake & Scull sprung a relative surprise by notching up a decent set of numbers for its 2019 results. There were boosts provided by one-off gains – the markets will be hoping that the company will keep surprising.
With FRC’s help, it stands a chance.