Dubai’s Drake & Scull to review business, seek new investors

Dubai-listed construction firm Drake & Scull International (DSI) has asked advisors for proposals to review its business and find new investors, the company’s chief financial officer Kailash Sadangi told Reuters on Monday.

The company has held informal talks with advisors in recent weeks on seeking a potential business review and fresh investment to bring the business “back to a profitable growth trajectory,” Sadangi said.

A legal adviser has been appointed to hold discussions with the Securities and Commodities Authority, the UAE's stock market regulator, over the possibility of bringing in investors and regulatory approvals that would be required.

The contractor is also considering an issue of mandatory convertible bonds to generate funds, he explained, adding that there are no plans currently to restructure the firm’s finances.

DSI has decided to gradually withdraw from its civil engineering business in Saudi Arabia, but will continue its civil engineering operations in the UAE through its subsidiary Gulf Technical Construction Co., Sadangi added.

The news comes after the company incurred a AED 207.6 million net loss in the second quarter. A slowdown in the construction sector and an ongoing oil slump weighed on results for the period.

The firm's CEO and vice chairman Khaldoun Tabari recently said that the company’s performance in the first half of this year had been impacted by project delays and cancellations “brought on by clients principally based in Saudi Arabia.”

“We believe that these developments reflect the considerable challenges we have been facing across the region due to a very challenging macro-economic environment,” he added.