Arabtec board to meet Monday to move forward with liquidation plan

The seventh meeting of the board in 2020 will be held on Monday, according to a filing to the Dubai Financial Market, where “all matters related to the liquidation plan” will be discussed.

No further details were given in the statement to the stock market.

The board previously met last Thursday when members agreed to proceed with plans to liquidate the company following a decision by shareholders to discontinue with the company and dissolve it due to its untenable financial situation.

The resolution of the shareholders grants the Arabtec board a maximum period of two months to allow for discussions with the main stakeholders before a liquidation application may be submitted to the competent courts.

The impact of the liquidation of Arabtec will send “reverberations” throughout the industry, with the repercussions felt on a much wider scale than simply those who are directly involved with the company and its current pipeline of projects, analysts told Arabian Business at the time.

Arabtec Holding was valued at about AED30bn ($8.17bn) at its peak in 2014 and is now worth AED795m, with the stock down 60 percent this year alone. 

By contrast, Dubai-based Drake & Scull International (DSI) reported a net profit of $54 million (AED199m) for H1, despite the global coronavirus crisis, which compared to a net loss of $228m (AED838m) for the same period last year.

The company also revealed discussions with banks to formulate a financial restructuring plan have reached “advanced stages”.

H1 results released through the Dubai Financial Market revealed a substantial drop in revenues, from $71m for the first six months of 2019, to $21m for the same period this year.

According to the release, the company’s backlog remains “stable” at $121m, which includes $50m from joint ventures, driven by ongoing operations in the UAE, Algeria, Kuwait, Iraq and Germany.