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Arabtec outlines financial recovery plan

Struggling construction contractor Arabtec Holding has laid out a three-year plan to return to financial health.

Under the strategy, outlined in a stock exchange statement on Thursday, Arabtec will strengthen its balance sheet with the disposal of some non-core assets and proceed with plans to raise AED 1.5bn ($408mn) via a rights offering.

Hamish Tyrwhitt, CEO of Arabtec

The third part of the three pronged strategy is to secure a backlog of new projects of at least AED 8bn to AED 9bn in 2018.

The programme includes the reduction of the company’s share capital via the cancellation of up to 4.5 billion shares to extinguish its entire accumulated losses.

Arabtec intends to finalise the details of the programme towards the end of this month in conjunction with releasing its audited accounts of fiscal year 2016. Shareholder will meet in April to vote on the resolutions.

In February Arabtec surprised the market by revealing a deeper than expected net loss attributable to shareholders of the parent company of AED 3.4bn in 2016 compared with AED 2.3bn in the previous year.

The contractor attributed its financial performance to “adverse market conditions which are having a negative impact on the construction industry throughout the GCC”.

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