Drake and Scull sells its Dh300m stake in One Palm project

Thursday, Mar 23, 2017

DUBAI

Drake & Scull International (DSI) has signed a deal to sell its ownership share in the One Palm project, a $544 million (Dh1.99 billion) residential development, to Omniyat Properties, the contractor said in a statement on Thursday.

DSI entered in to a joint venture with Omniyat Properties to launch the project in 2014, and is expected to generate around Dh300 million in liquidity from the sale, according to the statement.

The One Palm project is located on the left trunk of Palm Jumeirah and is due to be completed in 2018.

In February 2017, the company announced several strategic measures to stabilise the business in preparation for a new phase of financial & operational recovery.

The statement notes that “this transaction marks an important milestone in the DSI turnaround and capital restructuring plan that was initiated in the fourth quarter of 2016. The company is progressing steadily with its divestment programme and will continue to pursue the disposal and monetisation of its non-core assets and non-performing subsidiaries to generate cash for the business.”

In August 2016, DSI posted a net loss for the first half of the year due to project cancellations and provisions taken amid a challenging business environment. The company reported a net loss of Dh216 million in the first half of 2016, compared to a net profit of Dh34 million in the same period last year, DSI said in a statement posted on Dubai Financial Market’s website.

Designed by New York architects, Soma, the 84,541 square metre One Palm development will have 90 residences, starting at $3.8 million, and increasing to $54.5 million for a penthouse.

In March 2016, Omniyat appointed Brookfield Multiplex as the main contractor on the project.

The DSI Annual General Meeting of the shareholders is scheduled to take place in April 2017 in order to approve these measures. The exact date of the meeting will be announced by the end of March.

Staff Report