Dubai’s Arabtec said to ask banks to waive debt terms

Dubai-listed contractor Arabtec Holding is requesting banks to waive terms on its debt, Reuters reported, citing unnamed banking sources.

The construction firm, which reported a net loss of AED 3.5 billion in 2016, was in talks with its main creditors over the past month to waive the right for banks to call in facilities extended to the business, the sources said.

Some of the banks have provisionally agreed to Arabtec's request to waive terms on its debt, the report said.

Arabtec’s request comes as the company wants to ensure that the funds raised from its planned AED 1.5 billion rights issue are not exhausted in settling its liabilities, a source said.

The contractor will not be in breach of debt covenants after the rights issue, the source added.

The firm had in its 2016 financial statement said that it was "in breach of certain debt covenants."

Arabtec has scheduled its shareholders meeting today, and it will seek their approval for the right issue. Trading on its shares is suspended starting 11 am for the meeting.