Property News · April 14, 2017

Arabtec updates its plan to recovery


Arabtec on Thursday published an update to its three-step recapitalisation plan that it hopes shareholders will pass as part of a latest round of fund raising aimed at wiping out accumulated losses.In a note to the Dubai Financial Market (DFM), Arabtec reiterated that its total liabilities currently exceed the company’s total assets by Dh250.7 million.Under DFM rules, this means that shareholders are required to take part in a continuation vote. Arabtec shareholders are due to meet on Tuesday to approve the company’s restructuring programme, which will involve a Dh1.5 billion rights issue followed by a capital reduction.The rights issue will raise Dh1.5bn through the issue of 1.5 billion new shares, taking the total amount of shares in circulation beyond 6.1 billion. Following this, a capital reduction will take place, where more than 4.6 billion shares will be cancelled on a pro-rata basis, releasing liabilities that will allow the company to write off more than Dh4.6bn of accumulated losses.Aabar Investments, which is Arabtec’s single biggest shareholder with a 36.11 per cent stake in the company, is effectively underwriting the offer. On March 22, Arabtec filed audited accounts that showed that it declared a net loss to shareholders of Dh3.4bn last year, and that it made impairments of Dh1.9bn.Last month Arabtec published its strategy to revive the fortunes of the beleagued company. After stablising the company through its planned recapitalisation programme, board members say that next year the company plans to prepare the business for the future, which means keeping costs in check, delivering projects on time and to budget and ‘consistently’ securing a backlog of projects worth about Dh8bn to 9bn.The final phase, which is to begin in 2019, will focus on growth, most notably profit margins and cash generation, as well as boosting capabilities in: engineering procurement, construction and management; infrastructure; mechanical, electrical and plumbing work; and specialist construction. This would also be the first year in which it is targeting a potential dividend payment to shareholders.lbarnard@thenational.aeFollow The National’s Business section on Twitter

Source : thenational.ae
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