{"id":55023,"date":"2017-05-17T01:36:43","date_gmt":"2017-05-16T18:36:43","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=55023"},"modified":"2017-05-16T23:51:51","modified_gmt":"2017-05-16T16:51:51","slug":"provision-for-money-owed-weighs-on-drake-scull-international-first-quarter","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/provision-for-money-owed-weighs-on-drake-scull-international-first-quarter\/","title":{"rendered":"Provision for money owed weighs on Drake & Scull International first quarter"},"content":{"rendered":"


\nContractor Drake & Scull International (DSI) posted a Dh722.5 million loss in the first quarter as it made provisions against contract sums owed from customers.The company wrote down Dh572m in amounts due from customers on contract balances. It also declared a 23 per cent decline in year-on-year revenue during the period to Dh796m.The loss declared for the quarter “looks like a back-calculation” said Nishit Lakhotia, the head of research at Bahrain-based Securities & Investment Company, allowing it to meet its latest capital restructuring plan.
\nThe company had initially planned to cut the amount of shares it has in circulation by half, which was equal to about 115 per cent of its accumulated losses of about Dh992m by the end of 2016. The deal also involved Tabarak Investment injecting Dh500m of equity into the company, allowing it to buy 1.16bn shares at a discounted price of 43 fils per share, giving it a majority stake.However, this proposal was rejected initially by the regulator, the Securities and Commodities Authority, which forbade DSI from cancelling shares above the value of its accumulated losses.
\nMoreover, at its annual general meeting held this month, shareholders also voted down the plan to let Tabarak Investment subscribe at a discount.A rejigged structure involves Tabarak Investment instead buying Dh500m worth of shares at par value following a much greater reduction in the company’s share base – it is proposed that more than 1.7 billion shares are cancelled, leaving 580 million in circulation before Tabarak’s investment (giving it a 47 per cent stake).
\nThe Dh722m loss for the first quarter brings the firm’s accumulated losses to more than Dh1.71 billion – exactly the level of losses required to cancel 75 per cent of its shares.”The regulator will only allow you to only reduce your capital up to your accumulated losses. So they have added another Dh722m to their losses so they can reduce shares by 75 per cent and totally wipe out their accumulated loss before they get the new strategic investor into the company,” Mr Lakhotia explained.
\n“There is a regular net loss of about Dh140m that they would have made without this extraordinary provision.”DSI was unavailable for comment yesterday, but in a statement accompanying its first quarter trading figures the company’s chief executive, Wael Allan, said the firm was “confident that the completion of the capital restructuring programme will enable us to stabilise the business and help to resolve our financial challenges”.
\n“We are undertaking several strategic measures to improve our operations, control costs and eliminate inefficiencies affecting our business across all operating segments,” he said.Although the recapitalisation would be dilutive for shareholders, it may be necessary.The first quarter accounts for DSI were accompanied with a note from auditors PwC, which stated that its current liabilities exceed its assets by Dh856m and that it has a negative cash balance of Dh278m, indicating a “material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern”.
\nMr Lakhotia said the Dh500m of new money from Tabarak “is positive but is not that significant” in terms of DSI’s turnaround. “What is going to change the fortunes of the company is its ability to recover the amounts that is due to it.”The company is owed as much as Dh2bn by Saudi Aramco for work at the King Abdullah Petroleum Studies and Research Centre, which it completed in 2012, Mr Allan told The National last month.
\nmfahy@thenational.aeFollow The National’s Business section on Twitter
\n
\nSource : thenational.ae
\nRead more…Provision for money owed weighs on Drake & Scull International first quarter<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Contractor Drake & Scull International (DSI) posted a Dh722.5 million loss in the first quarter...<\/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-55023","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-ejt","jetpack-related-posts":[{"id":50237,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/drake-scull-breaches-terms-of-bank-loans\/","url_meta":{"origin":55023,"position":0},"title":"Drake & Scull breaches terms of bank loans","date":"March 30, 2017","format":false,"excerpt":"\r The contractor Drake & Scull International has breached covenant terms of its sukuk and other loans, according to the company's newly filed audited accounts. The company had a conditional waiver in place with its lenders, but according to the accounts statement filed on the Dubai Financial Market it was\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":22943,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/dubais-drake-scull-blames-cancelled-contracts-and-tough-saudi-market-for-second-quarter-loss\/","url_meta":{"origin":55023,"position":1},"title":"Dubai's Drake & Scull blames cancelled contracts and tough Saudi market for second quarter loss","date":"August 15, 2016","format":false,"excerpt":"\r Drake & Scull International (DSI) slipped to a loss of Dh207.6 million during the second quarter of 2016 (Q2 2015: Dh6.1m profit) as revenue dropped by 37 per cent year-on-year to Dh805m.The Dubai-based contractor blamed \"contract cancellations and additional one-off provisions\" for its plight, stating that the majority of\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":13092,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/dubais-drake-scull-q1-net-profit-falls-61-per-cent\/","url_meta":{"origin":55023,"position":2},"title":"Dubai's Drake & Scull Q1 net profit falls 61 per cent","date":"May 15, 2016","format":false,"excerpt":"\r Dubai's Drake & Scull (DSI) posted a 61 per cent fall in first-quarter net profit on Sunday, extending an earnings slump as its revenue declined.The contractor made a net profit attributable to shareholders of Dh9.8 million in the three months to March 31, it said in a statement. This\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":44119,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/contractor-drake-scull-to-raise-capital-after-loss\/","url_meta":{"origin":55023,"position":3},"title":"Contractor Drake & Scull to raise capital after loss","date":"February 14, 2017","format":false,"excerpt":"\r Drake & Scull International has become the second Dubai contractor in as many days to announce a capital raising after the company reported a Dh786.9 million loss for 2016.The company, which specialises in mechanical, electrical and plumbing work, said it had secured a commitment from Dubai-based investment bank Tabarak\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":58282,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/drake-scull-confident-on-debt-restructuring\/","url_meta":{"origin":55023,"position":4},"title":"Drake & Scull confident on debt restructuring","date":"June 19, 2017","format":false,"excerpt":"\r Drake & Scull International (DSI) will look to restructure its debt pile, which stood at Dh2.44 billion at the end of March, through the issue of a new sukuk or a syndicated loan, the company's acting chief financial officer Firas Kalthoum said on Sunday.Mr Kalthoum, whose appointment was announced\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4726,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/dubai-contractor-drake-scull-reports-dh936-million-loss-for-2015\/","url_meta":{"origin":55023,"position":5},"title":"Dubai contractor Drake & Scull reports Dh936 million loss for 2015","date":"February 14, 2016","format":false,"excerpt":"\r \r Dubai-based contractor Drake & Scull reported a Dh936.8 million loss for 2015, which it blamed on the \"unprecendent measures\" it had to take in the third quarter, where it was forced to make Dh984m in provisions relating to an continuing contractual dispute in Saudi Arabia.The company said that\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\/55023"}],"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=55023"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/55023\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=55023"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=55023"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=55023"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}