Drake & Scull International has confirmed that Tabarak Investment has acquired the majority shares of former CEO, Khaldoun Tabari.
The transaction is a boost to the ailing MEP contractor which is looking complete a capital restructuring programme approved by the shareholders at the Annual General Assembly Meeting held on May 4.
In a statement Drake & Scull said it continues to “review and optimise its organisational structure by merging and integrating core functions across operating segments to reduce overheads, streamline costs and to improve the bottom line performance”.
As part of the shake up the company has made a series of key appointments at both corporate and subsidiary levels and the new management team has been complemented with the addition of Feras Kalthoum as Acting Chief Financial officer of the Group.
The company today received from the Securities and Commodities Authority (SCA) further instructions to proceed with the final regulatory preparations in order to fulfil the approval requirements and to initiate the 75 percent capital reduction.
Phase 1 (capital reduction) of the capital restructuring programme is expected to be completed within six to seven weeks. Phase 2 (Capital increase) will include the AED 500mn capital increase to accelerate the entry of Tabarak Investment LLC as a major strategic investor in the company.
The initial projected timeline of the capital restructuring has been deferred by a period of one month and the company now expects to complete the programme by the end of Q3 2017.
Wael Allan, CEO, Drake & Scull International PJSC, said: “We are pleased to see Tabarak Investment reaffirm their unwavering commitment to the Company. With their unyielding support, we will aggressively continue to execute our turnaround strategy and undertake key business transformations and strategic initiatives in collaboration with all our stakeholders.
“I would like to reassure all our shareholders that the new management team is fully dedicated and geared to prepare a new phase of financial & operational recovery. Despite the short-term challenges, the company is well positioned to benefit from its leadership position in the MEP sector and to secure profitable projects in the UAE market in the near future.”
Feras Kalthoun, Acting CFO, Drake & Scull International PJSC, added: “I look forward to being part of the new management team assigned to stabilize the business and resolve the Group’s financial challenges. The completion of the capital restructuring program is essential to resolving the liquidity challenges of the Company and to rebalance the Capital structure of the Group.
“Our immediate priority is to plug-in our working capital deficit; improve collection to shore-up liquidity. Our short-term goals are to streamline our business, bolster liquidity, optimize governance and transparency, and secure high-potential projects. The UAE market remains buoyant and we expect to progress steadily with our turnaround strategy throughout the second half of the year.”