Staff Report
Dubai, UAE
Drake & Scull International, one of the largest Mechanical, Electrical and Plumbing (MEP) contractors in the GCC, said the company’s Board has completed its restructuring plan by writing off Dh4.1 billion and after issuing mandatory convertible sukuk to the Company’s creditors, in accordance with the approved restructuring plan, for the benefit of the financial and commercial creditors with the debts equivalent or exceeding Dh1 million.
Shafiq Abdul Hamid, Chairman of the Board of Directors of Drake & Scull International (DSI), emphasized the company’s completion of all other requirements as part of the restructuring plan agreed upon with creditors and approved by the competent courts, which include the company’s success in increasing its new capital by more than Dh450 million and obtaining approval from the Securities and Commodities Authority (SCA), writing off financial and commercial debts in full by Dh4,181,766,366, and issuing the remaining 10 percent mandatory convertible bonds into shares after five years from the date of issuance.
This rescue efforts will enable the bankrupt company to resume its activities by entering into tenders and obtaining new projects, leading to improving the company’s profitability and increasing its assets and shareholders’ rights.
Additionally, the company has started cash settlements for creditors with debts less than one million dirhams, with a total amount of Dh13,604,054 according to the final list of creditors published on January 30, 2024, under the supervision of the expert appointed by the competent court as a procedures trustee, in addition to any amount adjusted pursuant to objections filed with the court.
It is worth mentioning that DSI has numerous claims in the market that it seeks to collect through direct settlements or litigation through competent courts. Recently, Drake & Scull Engineering, one of the subsidiaries of Drake & Scull International, won a court judgment in its favour issued by the Court of Appeal, obliging one of the major companies in Dubai to pay an amount of Dh36,715,677 and fees, interest, and expenses. The company has begun taking the necessary measures to execute the award, noting that this amount includes bank guarantees.
Drake & Scull was originally founded as an engineering firm by Bernard Drake and Arthur Scull in the UK in 1874. It expanded globally as Drake & Scull International, planting its roots in the Arab world with its first base in Abu Dhabi in 1966. It experienced a sporadic rise for five decades during which it worked for large-scale projects including Emirates Golf Club, Baynunah Hilton, Jumeirah Beach Residences, Jumeirah Beach Hotel, and Dubai Internet City, and grew its portfolio across KSA, Jordan, and Oman among others.
The large-scale global MEP company was led by Jordanian businessman, Khaldoun Rashid Al Tabari, who took a majority stake in the company in 1998. In 2008, it became a publicly listed company on the Dubai Financial Market, offering 55 percent of its shares in a highly successful IPO of Dh1.22 billion that was oversubscribed 101 times.
The company underwent a period of financial turmoil from 2014, declaring losses worth Dh826.6 million (US$225 million) in 2015 and Dh732.9 million in 2016. Consequently, Tabari stepped down from his role as the CEO of the contracting giant. In 2018, it was off the DFM as it declared bankruptcy and faced billions in loss. It failed to show full financial disclosure caused by accounting mismanagement and faced legal cases.
As a classic example of resurgence, the company made a comeback on the DFM in 2024, aiming to clear off debts of Dh4 billion accumulated over the years. In the opening minutes, the stock was traded at Dh0.315, a 27 per cent jump from the last time the stock was traded in November 2018.
Ends
Also read: Drake & Scull gets nod to increase capital and resume share trading on DFM
