Dubai: The Dubai construction services firm Drake & Scull International has got itself a 12-month window to work on a financial turnaround plan that will stand a good chance for success.
This comes after Dubai Court of Appeal upheld the company’s argument that it’s restructuring plan will work. The Drake & Scull issue has been through years-long stretch in the UAE courts, and recently there had been a verdict that the company should go into liquidation.
This is now what has been overturned through the Court of Appeal.
The Court, on November 1, also ruled to stop all judicial procedures against the company and its subsidiaries, as well as ceasing all execution procedures against them.
“The Court granted the Company and its subsidiaries a period of 12 months to implement the restructuring plan, starting from the date of determining the final list of creditors,” said Drake & Scull in a statement.
“This period increases according to the progress of the restructuring procedures and the necessity of the situation at the time.”
The 12-month window also gives time for the company’s owners to pursue some of the financial claims it has against the previous management in the local courts. Drake & Scull had also had progress in stitching a revised repayment schedule with creditors.
Thus, Drake & Scull has for now won time and not go the way Arabtec - in its time one of the biggest construction companies in the Middle East - did into liquidation.
In 2018, the company found that the financials put out by the previous management bore no resemblance to the actuals, and that accumulated losses had cleared an eye-watering Dh4 billion.
We are delighted by the Court of Appeal’s decision and ruling to approve the agreed-upon restructuring plan, which was approved by the majority of creditors
A huge relief
”I have previously stated my personal commitment, along with my fellow Board Members of DSI, to working hard, by all means, to restore some of the rights of shareholders who were harmed by the decisions that were previously taken in the company by its previous management," said Shafiq Abdelhamid, Chairman, who would have been much relieved after the court decision.
Claim damages from previous management
"Either through the plan that was developed to restructure the company and settle its debts in accordance with the provisions of the law. Or through a fair and impartial judicial process to demand compensation from the previous management for these damages.”
A re-listing on DFM?
“Based on the ruling issued by the esteemed court approving the restructuring plan and upon completing all its conditions, the company will cooperate with the Securities and Commodities Authority and the Dubai Financial Market to return its shares to trading as soon as possible," the Chairman added.
And also 'work on raising the company’s capital in accordance with the restructuring plan during the first quarter of 2024'.
In the November 1 verdict, the Court of Appeal:
- Approved the restructuring plan in accordance with the plan agreed upon by the company and approved by the majority of its creditors.
- The ruling also included the appointment of an expert to oversee the restructuring procedures, publication procedures in local newspapers, and setting a deadline of 20 days from the date of publication in local newspapers for unregistered creditors to register their names.
- Subsequently, a final list of all creditors and their debt amounts shall be determined.
- The Court granted DSI and subsidiaries 12 months to implement the restructuring plan, starting from the date of determining the final list of creditors.
- This period increases according to the progress of the restructuring procedures and the necessity of the situation at the time.
More to follow...