Drake and Scull postpones shareholders meeting to October

Dubai contractor was scheduled to hold a meeting this month amid deepening losses

Drake & Scull International said it postponed until next month a shareholders meeting as it faces mounting losses. Rich-Joseph Facun / The National

Drake and Scull International, the Dubai-based contractor facing mounting losses, postponed until next month a shareholder meeting that was scheduled for September 27 and could seal the fate of the cash-strapped company.

“The quorum of the General Assembly meeting of Drake and Scull International has not been met, therefore, another meeting will be held on Thursday 4th October [in Dubai],” Drake and Scull said in a statement to the Dubai Financial Market, where its shares are traded, on Sunday.

The company, which has faced mounting losses since 2015, had earlier said it was calling a shareholder meeting on September 27 in accordance with UAE companies law. The law states that shareholders must decide on whether to dissolve a company if its losses amount to half of its issued share capital. After the statement was issued, the company's shares plunged the maximum daily limit of 10 per cent to Dh0.405, leaving them down 82 per cent since the end of 2017.

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The company was quick to issue a another statement that said its board was making all efforts to safeguard shareholders’ interests and “ensure the seamless operation of the company and its continuity”.

The shareholders meeting to vote is a “mere legal requirement” in accordance with UAE company law and does not mean it intends to dissolve the company before its expiry term, the statement added.

Private equity firm Tabarak Investment increased its shareholding in DSI in September despite the drop in the company’s shares. It raised its stake to 13.73 per cent from 13.26 per cent.

Drake and Scull posted a second-quarter net loss of Dh181.1 million.