Dubai: Drake & Scull to issue convertible sukuk in Q2 2018

Dubai-based contractor, Drake & Scull International, announced that it is targeting to issue a sukuk convertible into equity in Q2 2018.

On March 27, 2018, the board of directors approved plans for the issuance of convertible sukuk with an indicative value of minimum AED450mn or the equivalent in other currencies, as private placement or public issuance to be converted to shares over a maximum period of five years, at a price of AED3 per share or at a discount of 25% of the market price of the share, to be determined at the time of conversion.

The sukuk issuance is subject to regulatory and shareholders’ approval at the company’s upcoming general assembly meeting, which is scheduled to convene in April 2018, according to a statement on Dubai Financial Market.

Rabih Abou Diwan, investor relations director, Drake & Scull International, stated: “The sukuk issuance comes within the framework of the strategic plan approved by the board of directors of the company, as a succession of the restructuring and recapitalisation efforts implemented to secure the required funding for the ongoing and future projects portfolio in the region.

“The key objective is diversification of our financing; and the sukuk offers a sharia compliant platform that is appealing and reassuring to a larger spectrum of investors, and most importantly to our shareholders. After the successful completion of our debt restructuring program across our key markets and the stabilisation of the business in Q1 2018, our goal is to use the proceeds of the sukuk to enhance the operational capacity of the group in the MEP sector. We are also concurrently working closely with our banks to secure the required working capital facilities for our new projects portfolio and the targeted project awards scheduled for announcement in April 2018.”