Creditors to vote on Drake & Scull restructuring plan next month

The company's liabilities outweigh its assets by about Dh3.7bn

Drake & Scull's Dubai headquarters. The company says it is still delivering contracts, including at Abu Dhabi's Reem Mall. Rich-Joseph Facun / The National

Dubai-based contractor Drake & Scull will present a plan to restructure the company's debts at a meeting of creditors next month.

The company, whose shares have been suspended from trading on the Dubai Financial Market since November 2018, entered into a formal restructuring process overseen by the Financial Reorganisation Committee in July and has been collating creditor claims since September. A full list of claims is due to be published this month after being reviewed by the FRC.

The company then intends to call a general meeting of creditors next month "to present the restructuring plan and voting thereon", it said in a statement to the Dubai Financial Market on Tuesday.

"The company will thereafter disclose the results of the voting after obtaining the approval of the relevant government authorities and the Securities and Commodities Authority," the statement said.

Drake & Scull last month posted results for the third quarter of 2020, which showed its accumulated losses rose to almost Dh4.9 billion, and liabilities outweigh assets by about Dh3.7bn. Measures being undertaken to plug this gap include finalising its restructuring plan with creditors, closing out existing projects and attempting to win new projects in the UAE, Tunisia, Kuwait, Iraq, Algeria and Germany. It also plans to "pursue legal cases against third parties and previous management".

The financial restructuring would be the second the company has undergone in three years. In 2017, a capital restructuring took place that saw Dh1.7bn worth of shares cancelled to expunge historic losses and Dh500 million invested by private equity firm Tabarak Investment for a strategic stake in the company.

"The operations of the company and its subsidiaries are still ongoing and its projects are under execution", including the construction of Abu Dhabi's Reem Mall, Drake & Scull said in the statement.