Drake and Scull International (DSI), the Dubai-based construction contractor, has announced that it is targeting the issue of a sukuk convertible into equity in Q2 2018 following a successful debt restructuring programme.
In a statement, the contractor said that the board of directors at DSI approved plans on March 27, 2018, for the issuance of convertible sukuk with an indicative value of a minimum of $122.5 million, as private placement or public issuance to be converted into shares over a maximum period of five years, at a price of AED3 per share, or at a discount of 25% of the market price of the share, to be determined at the time of conversion.
The sukuk issue is subject to regulatory and shareholder approval at the company’s upcoming General Assembly meeting, which is scheduled to convene in April 2018, the statement added.
“The sukuk issuance comes within the framework of the strategic plan approved by the Board of Directors of the company, as a succession of the restructuring and recapitalisation efforts implemented to secure the required funding for the ongoing and future projects portfolio in the region,” said Rabih Abou Diwan, investor relations director, DSI.
“The key objective is diversification of our financing; and the sukuk offers a sharia compliant platform that is appealing and reassuring to a larger spectrum of investors, and most importantly to our shareholders.”
“After the successful completion of our debt restructuring programme across our key markets and the stabilisation of the business in Q1 2018, our goal is to use the proceeds of the sukuk to enhance the operational capacity of the group in the MEP sector. We are also concurrently working closely with our banks to secure the required working capital facilities for our new projects portfolio and the targeted project awards scheduled for announcement in April 2018,” Diwan concluded.