DUBAI (Reuters) - United Arab Emirates private equity firm Tabarak Investment said it is committed to restoring Drake & Scull to financial health, despite a plunge in the Dubai construction company’s shares.
“Our business approach is to acquire low-performing companies and get them in shape. That’s what Tabarak is determined to do with Drake & Scull,” public relations manager Nader Muqbel said in an email to Reuters at the weekend.
“As the majority shareholder of DSI, we have committed over a billion dirhams ($272 million) of projects to Drake & Scull which will be awarded to the company,” he added.
Tabarak owns 13.73 percent of Drake & Scull, the builder said in a stock exchange statement on Sunday. Some of those shares are held in the name of Ajman Bank as collateral against financial facilities but Tabarak retains ownership rights as beneficiary, the statement said.
Drake & Scull, which posted a second-quarter net loss of 181.1 million dirhams, said on Wednesday it was calling a general assembly on Sept. 27 under an article of UAE company law.
The law requires shareholders to vote on whether to dissolve companies if their accumulated losses have reached half of their issued share capital.
After the statement, Drake & Scull’s shares plunged their 10 percent daily limit to a record low of 0.405 dirham, leaving them down 82 percent since the end of last year.
The firm issued a second statement on Wednesday saying its board and management would do their utmost to ensure it continued operating. The general assembly vote “is a procedural step that needs to be taken and doesn’t mean that there is an intent to dissolve the Company prior to the expiry of its term,” it said.
Reporting by Andrew Torchia; Editing by Tom Arnold