Drake & Scull appoints external restructuring advisers as losses widen

Third-quarter net loss grew to Dh498m as company closes legacy projects

Drake and Scull says loss due to project expenditures. Rich-Joseph Facun / The National

Drake & Scull International appointed external restructuring advisers as it reported widening losses for the third quarter of 2018, attributed to project expenditure.

The Dubai-listed engineering and construction company posted a net loss of Dh498 million for the three months to September 30, compared to a net loss of Dh181m in the previous quarter.

"The loss is attributable to the final phase of the close-out of the company's legacy projects - part of the ongoing restructuring programme which includes the assessment of all current and legacy projects," DSI said in a statement to the Dubai bourse, where its shares are traded, on Wednesday.

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Further losses are expected in the fourth quarter of 2018 as other legacy projects are closed and handed over, the company added.

DSI said it appointed Tussbridge Advisory as financial advisers, and law firms Allen & Overy and Al Tamimi & Company as legal advisers, to oversee the development of a "new and comprehensive business plan". The appointments are part of continued restructuring efforts launched two years ago to stabilise the business.

The team of advisers "working with our newly formed Restructuring Committee, will not shy away from taking the tough decisions necessary to refocus the business and, with support from our many stakeholders, restore the Company to financial health”, said Yousef Al Mulla, the group chief executive of Drake and Scull.

Since 2016-2017, Drake and Scull has worked to scale down operations and non-performing business streams, while increasing focus on core markets. The company said it is "pursuing ongoing measures to  accelerate bidding efforts for new projects".