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Abu Dhabi, UAEMonday 17 December 2018

DSI working with bourse and market regulator for resumption of trading 

The contractor's shares were suspended from trading on November 14

Drake & Scull International is working with the Dubai Financial Market and market regulator to lift suspension of trading of its shares. Bloomberg.
Drake & Scull International is working with the Dubai Financial Market and market regulator to lift suspension of trading of its shares. Bloomberg.

Drake & Scull International, the loss-making contractor whose stock has lost 84 per cent of its value this year, is in talks with the Dubai bourse and the UAE’s market regulator to remove the trading suspension of its shares.

The company's shares were barred from trading on November 14 after DSI announced the appointment of external restructuring advisers as its third-quarter loss widened on the back of project costs.

DSI is in “continuous communication and co-operation with the Dubai Financial Market and the Securities and Commodities Authority to lift the suspension on the trading of the company's shares once the ongoing operational and financial restructuring plan is approved”, it said in a bourse filing on Tuesday. DSI will provide “any additional information that the authorities may require in this respect”, it added.

DSI will further disclose to the shareholders any updates, it said, without saying when it expects the trading to resume. The company's stock has plummeted this year, and is among the worst performers on the DFM that has plunged 18 per cent year-to-date.

DSI has struggled to contain its losses amid a slowdown in the construction market. The company posted a net loss of Dh498 million for the three months to September 30, compared to a net loss of Dh181m in the previous quarter and a net loss of Dh317.6m in a year-earlier period.

DSI attributed the loss to the final phase of the close-out of the company's legacy projects, part of the ongoing restructure, which includes the assessment of all current and legacy projects.

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The contractor expects further losses in the fourth quarter of 2018 as other projects are closed and handed over, the company said in a November 14 statement.

DSI has appointed Tussbridge Advisory as financial advisers, and law firms Allen & Overy and Al Tamimi & Company as legal advisers to oversee the development of a new business plan.

DSI, like some of the other contracting companies, has fallen on hard times due to a softening property market in the UAE as rental and sale prices continue to decline amid rising inventory. The company has struggled to maintain profitability in recent quarters and launched restructuring efforts two years ago to stabilise its business.

DSI on Tuesday said it will continue to deliver projects and step-up bidding to secure new projects.

“The company has submitted a number of proposals for carefully selected projects, predominantly in the UAE, with several due to [to be] signed in the coming months,” it added.