Dubai contractor Drake & Scull completes restructuring plan

Company receives required voting percentage from its 600-plus creditors for a consensual agreement

DSI filed an application in the third quarter of 2021 to be subject to restructuring procedures under UAE Bankruptcy Law. Rich-Joseph Facun / The National

Dubai-based contractor Drake & Scull International has “officially completed” its restructuring plan after reaching settlements with a “number of creditors".

The company's management has been notified by the Financial Reorganisation Committee (FRC) that the restructuring plan is complete after DSI achieved the required voting percentage from its 600-plus creditors for a consensual agreement.

The voting percentage exceeded two thirds of creditors’ claims in terms of the value of the indebtedness, the company said on Monday in a statement to the Dubai Financial Market (DFM).

“We are hopeful that Drake & Scull will return to the path of growth and prosperity in the coming years,” DSI chairman Shafiq Abdelhamid said.

The financial restructuring is the second that DSI has undergone in the past four years.

In 2017, a capital restructuring took place that resulted in Dh1.7 billion ($462 million) worth of shares being cancelled to expunge historic losses, with private equity firm Tabarak Investment committing Dh500m for a strategic stake in the company.

In the third quarter of 2021, DSI also filed a formal application with Dubai Courts, requesting that the company to be subject to restructuring procedures in accordance with the emergency provisions of UAE Bankruptcy Law.

“We look forward to the decision of the Dubai Courts in regards to the submitted application and anticipated completion of the restructuring process,” said Mr Abdelhamid.

As per the procedures and settlements DSI has reached with its creditors, along with the adoption of the financial restructuring plan that was initially approved by several of the major lending banks, the financial reorganisation procedures have reached their final stage, the company said.

The procedures are in “accordance with the objectives stipulated in [the] FRC’s decision on May 17, 2020, regarding the acceptance of the company’s request … for the financial restructuring of its debts”, it said.

DSI reported a sharp drop in is 2021 net profit, which stood at Dh23m, down from Dh94.8m in 2020.

The company said it “will make every effort for its stock to resume being traded on the DFM after the completion of the restructuring plan”, followed by the obtaining of the necessary approvals.

“Any developments regarding the resumption of trading will be announced through the official channels,” it said.