Dubai contractor Drake & Scull to seek new investors
Contractor has held informal talks with advisors about reviewing business and finding new equity – report
Drake & Scull International, the Dubai-based construction and engineering company, has initiated a review of its business as it looks to find strategic investors, one of its senior executives has said.
In an interview with Reuters, Kailash Sadangi, chief financial officer of the contractor, said that Drake & Scull International had held informal talks with advisors about reviewing its business and on finding new equity for the company.
“The new leadership is strategically transforming the business to bring it back to a profitable growth trajectory,” he explained during a telephone interview, adding that the company has appointed a legal advisor to hold discussions with the UAE Stock Market Regulator, the Securities and Commodities Authority, about the possibility of bringing in strategic investors and the regulatory approvals that would be needed.
Sadangi also said that an issue of mandatory convertible bonds is also among the options being considered by the contractor’s senior management team. These types of bonds would need to be converted into underlying shares by a specific date, he explained.
Drake & Scull International is one of the largest engineering firms in the GCC, with a workforce of more than 31,000 people. In August 2016, the company reported that it had swung into the red in the second quarter of the year.
It said that it had made a net loss of $56.5 million during the period, compared to a $2.77 million profit a year ago.
Sadangi added that Drake & Scull had made a strategic decision to withdraw gradually from its civil engineering business in Saudi Arabia, but that it would continue civil engineering in the UAE, through its subsidiary Gulf Technical Construction Co.
He also said that the company had no plans at present to restructure its finances, despite its liabilities totalling $1.68 billion on June 30, according to its financial statements.
