Dubai: The Dubai engineering firm Drake & Scull International – which had run up accumulated losses of Dh5 billion – is ready with its restructuring.
The company has been able to reach settlements with multiple creditors, and “thereby achieved the required voting percentage for a consensual agreement, which exceeded two-thirds of the creditors’ claims in terms of the value of the indebtedness,” the company said.
This will buy Drake & Scull more time to go through a turnaround plan and with the active buy-in from creditors and lenders. It has already won approval from its lenders – representing ‘major banks – for the financial restructuring plan.
“The financial reorganization procedures have reached their final stage and are in accordance with the objectives stipulated in FRC’s (Financial Restructuring Committee) decision on May 17, 2020, regarding the acceptance of the request submitted for restructuring of the company’s debts,” Drake & Scull said in a statement.
Drake & Scull’s owners and shareholders can take comfort from the progress achieved to date. The approval process did get delayed quite a bit, market sources say, which added to the doubts about whether the company be able to put together the turnaround.
"We thank the FRC appointed expert, financial advisors, and legal consultants for all their tremendous efforts," said Shafiq Abdelhamid, Chairman of DSI. "We extend our sincerest appreciation to all our shareholders for their patience and continuous support, and we are hopeful that Drake & Scull will return to the path of growth and prosperity in the coming years.
"We look forward to the decision of the Dubai Courts in regards to the submitted application and anticipated completion of the restructuring process.”
While Drake & Scull will pursue an operational turnaround through new projects, it will also pursue the possibility of recovering of what it says are funds diverted from the company by the previous management. The fund diversion aspect and other legal processes associated with it are being overseen by authorities in Abu Dhabi.
Drake & Scull's shares have not been trading on DFM for some time now.
The Company had previously disclosed the filing of a formal application in Dubai Courts in the third quarter of 2021, requesting the restructuring procedures in accordance with the emergency provisions of the UAE Bankruptcy Law.
More to follow...