Marka’s liquidation proposal still subject to regulatory approval
Board members decided to liquidate firm last week but formal proceedings must ensue, company says
The board of Dubai retailer Marka will put its proposal to liquidate the company – agreed at a general assembly meeting last week – to the markets regulator before seeking shareholder approval at an undetermined later date.
Until the Securities and Commodities Authority ratifies the liquidation proposal, the company will continue to operate as normal, Marka said in a filing yesterday to the Dubai Financial Market, where its shares are traded.
The retail franchiser, which counts fashion, sports and food retailers – including Lebanese restaurant Reem Al Bawadi and Italian ice cream shop Morelli’s Gelato among its brands – has not earned a profit since listing on the DFM in 2014.
It began a restructuring process in 2017 including selling stores and cutting operational costs. However, its first-quarter losses for 2019 widened further, standing at Dh295.8 million for the first three months compared to Dh242.7m a year earlier, according to a regulatory filing in May.
Investors approved a motion to initiate proceedings to wind up the company during its annual general meeting on May 15, Marka’s chairman Khalid bin Kalban told The National. The bourse filing said that last week’s agreement to liquidate the company “does not constitute the approval of the shareholders to dissolve and liquidate the company”.
Instead, the proposal must first obtain approval from the regulator, which would then invite Marka’s board to hold a special general assembly to consider the proposal and hold a formal shareholder vote on whether to officially pursue the liquidation.
“The liquidation of the company shall be considered after the shareholders have been informed of the required procedures in this regard in accordance with the provisions of the law,” the filing added.
In April, Marka said a share capital reduction of Dh450 million – approved by shareholders in March – would go ahead as planned to help extinguish accumulated losses, and invited creditors to deliver documents detailing debts owed to them within the ensuing 30 days.
The introduction of VAT in January 2018, lower oil prices and the rapid growth of e-commerce has affected consumer spending in the UAE and affected many retailers across the region.
Updated: May 19, 2019 06:53 PM