Dubai: Drake & Scull International, the Dubai based contractor, can now start participating in new bids and aim to secure new projects. This comes after the company - which late last month returned to DFM trading after a 5-year gap - completed key milestones in its financial restructuring.
This includes a writing off of over Dh4 billion in obligations that Drake & Scull accumulated over the years.
"The company completed all implementation steps last week, receiving endorsements from the legal opinions issued by its legal advisors confirming that all requirements under the restructuring plan have been met," Drake & Scull said in a statement.
The restructuring plan - approved by a court - entails writing off 90 per cent of the debt. And with its bigger creditors issue mandatory convertible sukuk for the remaining 10 per cent, which will be converted into shares after 5 years from the issuance date. Or in the case of smaller creditors, go for a cash settlement on the remaining 10 per cent.
The stock is trading at Dh0.369 on DFM, gaining more than 3 per cent.
Pay off small creditors
"The company has initiated cash settlements for creditors with debts less than Dh1 million, amounting to a total of Dh13.6 million in accordance with the final creditors' list published on 30 January 2024, under the supervision of the court-appointed expert acting as a trustee for the procedures," said a statement.
"Any amount may be adjusted based on objections submitted to the court."
It is worth noting that the court’s approval of the restructuring plan and its implementation has halted all judgments and lawsuits
Meeting all obligations
In its status update, the contractor also said it has 'fulfilled all other obligations' set out in the restructuring plan agreed with financial and commercial creditors and 'approved by the competent courts'.
Write-off
The completion of the restructuring 'allows' the company to write-off Dh4.18 billion from the accounting records, which will be reflected in the Q2-2024 financial statements. "This is a major achievement which opens new opportunities for the company to expand its operations within and outside the country by entering new bids, thus enhancing profitability, assets, and shareholders’ equity," the statement said.
On a parallel track, "The company continues to pursue numerous claims in the market through direct settlements or litigation before the competent courts," it added.
