Dubai’s Drake & Scull narrows net loss; plans capital restructuring

Dubai-listed contractor Drake & Scull International (DSI) narrowed its net loss to AED 786.9 million in 2016, from AED 938.8 million the previous year.

Revenues for the year slipped to AED 3.24 billion from AED 4.2 billion in 2015, it said in a statement to the Dubai Financial Market (DFM).

The firm’s 2016 results were impacted by major revenue reversals, profit adjustments, cost overruns, and investment impairments – primarily from several legacy projects in Saudi Arabia.

DSI said it plans to propose a rights issue of AED 500 million in equity, as part of a turnaround and capital restructuring plan.

The company added that it had received a binding offer from a United Arab Emirates-based strategic investor, Tabarak Investment LLC.

The contractor also plans to seek an approval from the Emirates Securities and Commodities Authority (SCA) for a 50 percent capital reduction.

The capital cut through the cancellation of shares will be on a pro-rate basis at a 2:1 ratio and apply to all DSI shareholders. The company has called a shareholders’ meeting in April to approve the plan.

The DSI stock plunged 5.7 percent on DFM to AED 0.45 with minutes of market opening on Tuesday.