DSI gets nod to sell assets and continue operations despite losses
Drake & Scull International appointed restructuring advisers in November last year
The board of Drake & Scull International received approval of shareholders to sell some of the assets of the Dubai-listed contractor as it tries to narrow losses amid an ongoing restructure.
“It was resolved by the majority of shareholders to grant the board to liquidate, sell or close of the branches of the company or subsidiaries according to the restructuring plan,” DSI said in a statement to the Dubai Financial Market, where its shares are listed.
The board also won approval to sell the company’s stake in the Wahat Al Zawya Holding for Dh96 million. DSI did not say what other assets or subsidiaries it plans to sell or liquidate.
DSI shareholders also voted in favour of continuing company operations, whose sustained losses are more than half of its issued share capital, it said.
The engineering and construction contracting company appointed restructuring advisers in November last year, after posting a net loss of Dh498m for the three months to September 30, compared to a net loss of Dh181m in the previous quarter. It was the most recent quarterly financial statement filed to the bourse by the company, which at the time said it expects losses to widen in the fourth quarter of 2018.
DSI has appointed Tussbridge Advisory as financial adviser, and law firms Allen & Overy and Al Tamimi & Company as legal advisers, to oversee the development of a new business plan. The appointments are part of continued restructuring efforts launched two years ago to stabilise the business, which had fallen on hard times amid a softer property and construction sector in its core UAE market on the back of the three-year oil price slump that began in 2014.
The team of advisers "working with our newly formed restructuring committee, will not shy away from taking the tough decisions necessary to refocus the business and, with support from our many stakeholders, restore the company to financial health”, DSI said in September.
Since 2016-17, DSI has been scaling down its operations as it tries to get rid of its non-performing business streams. The company appointed Tawfig Abu Soud as group chief executive in January and in December selected board member Obaid Bin Touq as its new chairman.
The shareholders at the meeting held on Monday also agreed to the appointment of three new board members, DSI said.
Updated: April 9, 2019 01:49 PM