{"id":16008,"date":"2016-06-09T21:36:20","date_gmt":"2016-06-09T14:36:20","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=16008"},"modified":"2016-06-09T20:00:13","modified_gmt":"2016-06-09T13:00:13","slug":"arabtec-to-approach-banks-and-shareholders-for-more-cash","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/arabtec-to-approach-banks-and-shareholders-for-more-cash\/","title":{"rendered":"Arabtec to approach banks and shareholders for more cash"},"content":{"rendered":"


\nArabtec Holding, the country’s biggest-listed construction company, may need to tap shareholders in the future to shore up its balance sheet to bid for more prestigious contracts, according to analysts.Arabtec’s board will meet on Monday and discuss plans to talk to shareholders and banks about improving its capital structure, less than two weeks after shareholders approved a move to use Dh1 billion of reserves to write down losses, the company said in a statement to the Dubai Financial Market.The company had accumulated losses of Dh2.27 billion by March 31 after posting negative results in six successive quarters, which meant it was close to breaching a market rule that states companies are not allowed to accrue losses amounting to more than 50 per cent of its share capital. Arabtec’s share capital stood at Dh4.6bn on March 30.The company, which counts the Abu Dhabi state-owned fund Aabar as its largest shareholder, has been through a whirlwind of trouble over the past three years, with the exit of senior managers and its chairman and amid doubts about building 1million homes in Egypt under a multibillion dollar deal. Sanyalak Manibhandu, the head of research at NBAD Sec\u00adurities, said that Arabtec “will probably need to have more long-term financing” to enable it to bid for substantial new projects. There have been rumours in the marketplace that the company is preparing a bid to participate in the construction of Emaar Properties’ new tower at Dubai Creek Harbour, following on from its earlier work at Burj Khalifa, which it built alongside Samsung C&T and Besix, he added. Arabtec declined to comment on the rumours, or on its fundraising plans.”In the short term, they will probably want to borrow more money from banks. And at some point, when things get better, they may have to tap shareholders for more equity,” Mr Manibhandu said. “But that can’t be done in the near term. The cost of equity would be a lot higher than the company would want to pay.”He argued that the company needs to demonstrate a couple of profitable quarters and book some sizeable new contracts before tapping investors for more cash.Sebastien Henin, the head of asset management at Abu Dhabi-based The National Investor, said that Arabtec is operating in a tough market with “intense competition” for contracts. Firms in the sector are also having to contend with late payments from government clients, which are eating into their cash flow, he added.”Margins have tightened a lot and from the credit point of view things have deteriorated,” said Mr Henin. “It would be in a more comfortable position if it were to raise more capital.”Allen Sandeep, a director of research at Egypt’s Naeem Brokerage, said that the contractor faced a “real challenge” in addressing liquidity requirements.”Cash-to-backlog has plummeted to 2 per cent, well below the 5 to 10 per cent conven\u00adtional norm,” he said.He pointed to the fact that its working capital had increased by more than Dh500 million during the past couple of quarters, which is mainly due to an increase in money owed to it.”Total receivables (inclusive of Saudi Arabia) amount to Dh9.5bn, based on our calculations.”Mr Sandeep said options available to Arabtec include a bond issue, a convertible sukuk or another rights issue. Arabtec had raised a Dh2.4bn in a rights issue in July 2013 in a move that doubled the size of its shareholder capital.”In addition, we do not rule out the possibilities of the company writing off some more of its outstanding receivables going forward,” Mr Sandeep said.Arabtec shares rose 0.7 per cent to Dh1.43 in Dubai yesterday. They are up 14.4 per cent so far this year.mfahy@thenational.aeFollow The National’s Business section on Twitter
\n
\nSource : thenational.ae
\nRead more…Arabtec to approach banks and shareholders for more cash<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Arabtec Holding, the country’s biggest-listed construction company, may need to tap shareholders in the future...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-16008","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-4ac","jetpack-related-posts":[{"id":47203,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/arabtec-holding-to-seek-approval-for-annual-general-meeting-over-rights-issue\/","url_meta":{"origin":16008,"position":0},"title":"Arabtec Holding to seek approval for annual general meeting over rights issue","date":"March 8, 2017","format":false,"excerpt":"\r Arabtec Holding's board will meet on Sunday to discuss when it will next update shareholders on its turnaround programme, including a Dh1.5 billion rights issue to wipe out accumulated losses, the Dubai-listed contractor said yesterday. This will be its third board meeting of the year. The company is proposing\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":52193,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/arabtec-shareholders-approve-rights-issue\/","url_meta":{"origin":16008,"position":1},"title":"Arabtec shareholders approve rights issue","date":"April 18, 2017","format":false,"excerpt":"\r Arabtec's shareholders approved all of the resolutions set out at its annual general meeting today, including a proposal to undertake a capital restructuring that will see it raise Dh1.5 billion through a rights issue, and the subsequent cancellation of more than 4.6 billion shares allowing it to write down\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":15066,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/arabtec-to-use-dh1-billion-reserves-to-wipe-out-losses\/","url_meta":{"origin":16008,"position":2},"title":"Arabtec to use Dh1 billion reserves to wipe out losses","date":"June 1, 2016","format":false,"excerpt":"\r A meeting of shareholders in Dubai-listed construction firm Arabtec Holding approved on Wednesday a plan to use Dh1 billion of the company's statutory reserves to wipe out some of its accumulated losses.The company has been struggling with a difficult industry environment as Arabian Gulf economies slow and governments restrain\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":52231,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/arabtec-rights-issue-gets-green-light-after-stormy-general-meeting\/","url_meta":{"origin":16008,"position":3},"title":"Arabtec rights issue gets green light after stormy general meeting","date":"April 18, 2017","format":false,"excerpt":"\r The chief executive of Arabtec Holding put in a robust defence of the construction company's decision to embark on a recapitalisation when quizzed by shareholders at a stormy annual general meeting on Tuesday, where a Dh1.5 billion rights issue aimed at boosting its balance sheet was approved.Hamish Tyrwhitt also\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":53463,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/arabtec-plans-to-get-rights-issue-sorted-this-month\/","url_meta":{"origin":16008,"position":4},"title":"Arabtec plans to get rights issue sorted this month","date":"May 2, 2017","format":false,"excerpt":"\r The contractor Arabtec has said that it is planning to tie up its rights issue - the first step of its capital reorganisation programme to clean up its balance sheet - by the end of this month.Following a board meeting held yesterday, the company said that it will publish\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":51544,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/capital-restructuring-will-allow-arabtec-to-focus-on-long-term-prospects-says-chief-executive\/","url_meta":{"origin":16008,"position":5},"title":"Capital restructuring will allow Arabtec to focus on long-term prospects, says chief executive","date":"April 11, 2017","format":false,"excerpt":"\r Arabtec Holdings's chief executive, Hamish Tyrwhitt, has said that he is confident the capital restructuring programme, for which the company will seek approval from shareholders next week, will allow the group \"to capitalise on the positive long-term outlook for the construction and engineering sector in our key geographic market\".\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/16008"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=16008"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/16008\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=16008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=16008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=16008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}