Arabtec’s net loss widens; plans AED 1.5 bln rights issue

Dubai-listed Arabtec Holding’s net loss widened to AED 3.5 billion in 2016, compared to a loss of AED 2.8 billion in 2015 due to impairment charges on high-risk items – which amounted to AED 2.8 billion – along with recurring, non-recurring and operational expenses, the construction firm said in a bourse statement on Monday.

The group’s revenue for 2016 reached AED 7.7 billion, an increase of 5.6 percent year-on-year.

The backlog of its existing committed projects stands at AED 18.1 billion.

“The group’s financial performance is a reflection of the adverse market conditions, which are having a negative impact on the construction industry throughout the GCC,” it added.

The company has also planned a shareholder meeting in April to seek approval to reduce its share capital in order to curb losses.

Arabtec intends to also raise AED 1.5 billion in equity through rights offering. The proposal, the firm said, is subject to shareholder and Emirates Securities and Commodities Authority’s approval.

The firm is said to be working with boutique investment bank Moelis to study options for the company's capital structure, according to Reuters report, citing unnamed sources.

Moelis was also expected to advise Arabtec on its balance sheet and liquidity ratio, the news agency said.

Arabtec stock dropped 9.9 percent to AED 1.19 within minutes of market opening on Monday.