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DUBAI, June 23 Dubai contractor Arabtec Holding
has laid off a significant number of employees in the
wake of chief executive Hasan Ismaik's departure last week,
sources with knowledge of the matter told Reuters on Monday.
The departures represent the latest upset for a company
which had seemed to be benefiting from contract wins reflecting
support for Egypt from the United Arab Emirates, but whose
prospects have been dented by questions over those contracts and
Large numbers of staff, including at least two senior
executives, have departed the company since Ismaik resigned, the
sources told Reuters, speaking on condition of anonymity because
of the sensitivity of the subject.
Arabtec declined to comment.
The sources couldn't confirm details including which
executives had departed or the exact number of people who had
left. News agency Bloomberg said the company's head of mergers
and acquisitions, Shohidul Ahad-Choudhury, and Chief Operating
Officer Mark Andrews had exited as part of the staffing cuts.
"As far as I know and from what I've heard from inside the
company, it has more to do with the change of management rather
than cost-cutting," said Allen Sandeep, director of research at
One source said most of the people departing had either been
hired by Ismaik or were perceived to be close to him.
Arabtec shares closed down 10 percent on Monday, the sixth
trading session in the last 11 in which it has fallen the
maximum daily limit allowed.
The stock has lost nearly half its value since the beginning
of June, as speculation swirled over the commitment of its main
shareholder - Abu Dhabi state-owned fund Aabar Investments - and
the position of Ismaik.
Aabar cut its stake in Arabtec to 18.94 from 21.6 percent
earlier this month, according to bourse data, while Ismaik
increased his holding to 28.85 percent from 8.03 percent.
The drop in Arabtec shares marks a swift turn-around after
the stock more than doubled in the first five months of the
year, as investors bought into the company's ambitious plans
which include a $40 billion contract with the Egyptian
government to build 1 million homes in the north African
However, the jitters of recent weeks have shown an
uneasiness at the pace of development.
"Of all the big contracts they've won, none of the revenues
are kicking in for maybe two years and a lot of them were won
because of Ismaik, so people are starting to think what value do
they (the contracts) really have and where is the floor for the
share price?" said one person with knowledge of the company.
(Reporting by Nadia Saleem and Olzhas Auyezov in Dubai and
Stanley Carvalho in Abu Dhabi; Writing by David French; Editing
by Andrew Torchia and David Holmes)