Dubai: The Dubai engineering firm Drake & Scull International has won some much needed time to stave off going into liquidation after a new verdict delivered by the Court of Cassation.
The financially troubled company will now proceed with measures to raise its capital base and return the DSI stock to trade on DFM. And ‘carry on its activity better than before’.
Drake & Scull in a statement insisted that its restructuring process is in the ‘final form’. The company, which had losses of Dh5 billion and which wiped out its equity. Simultaneously, it had payment obligations to deal with. All of these have been factored into the possible restructuring process, and helped by a recent project win in Jordan.
How has the Court of Cassation helped?
The Court on August 22 revoked an earlier judgement by the Court of Appeal on the matter of DSI's liquidation. The Court of Appeal will now have to come up with a new judgement.
It’s been 5 years since the company, which in its prime had been associated with multiple blue-chip projects in the UAE and Gulf, has gone through financial and legal issues. The current management has steadfastly maintained that the company has the wherewithal to turn itself around, and with a little help from its lenders and creditors.
An outside financial consultant also gave his views on the company’s standing and possibilities. “The Court of Cassation indicated in its judgement that the appointed expert by the Financial Reorganisation Committee had undertaken the task assigned to him in accordance with the provisions of the law,” DSI said in the statement.
DSI's immediate priorities
That would the completion of procedures before the Court of Appeals, and the approval of the court to go ahead with the restructuring plan. And by 'carrying on its activity better than before', this would guarantee to 'shareholders the restoration of their rights and the maximization of their profitability'.
Early this month, DSI was buoyed by a Dh307 million contract to build a waste water treatment plant in Jordan. According to a construction industry source, "DSI can be in the running for more project wins as soon as it gets clarity on the court proceedings. It's one reason many project promoters are being cautious when it comes to awards."