Dubai: UAE's construction giant Arabtec has formally announced that it will be going into liquidation after shareholders found the current financial situation "untenable". The company recorded a net loss of Dh794 million in the first-half of this year.
“In recent years, limited liquidity in the construction sector impacted the progress of Arabtec’s projects and this has been exacerbated by the effects of COVID-19," said Waleed Al Mokarrab Al Muhairi, Chairman. "Despite efforts to pursue legal and commercial entitlements and a restructuring of the company’s finances and operations, the situation in which Arabtec finds itself today is untenable."
The announcement comes after weeks of intense speculation over the once blue-chip entity's future. Shareholders finally voted at a general assembly meeting on September 30 voted to "discontinue with the company and dissolve it due to its untenable financial situation".
After getting shareholders' approval, the management will come up with a "plan of liquidation to maximize value for stakeholders through a controlled and efficient programme". "Over the coming weeks, the Company’s board and management will work closely with regulators to maximize value for all stakeholders," the Chairman added. "Our current priority is to ensure that everyone directly affected by this decision, is treated fairly during this challenging time.”
It was on Wednesday evening that media reports emerged about shareholders giving the go ahead for the dissolution. But there were still those who felt it would not reach this particular end point, more so as no statement was given on DFM (Dubai Financial Market), where it is listed.
The stock had a terrible September, being pummelled by a more than 30 per cent drop. And on Thursday, October 1, DFM authorities stopped trading of the stock - the stock of a company that built the Burj.