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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 internal strife.
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 Naeem Holding.
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 country.
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)