Wednesday, Mar 22, 2017

Dubai: Arabtec Holding said on Wednesday shares for its upcoming rights issue will be offered at a price of Dh1 per share — 15.6 per cent higher than Tuesday’s closing price of Dh0.865.

The rights issue, in which the Dubai-listed construction firm will issue 1.5 billion new shares, is part of a recapitalisation programme that was announced by the company in mid-February to extinguish the Dh4.6 billion in accumulated losses.

In a statement posted to the Dubai bourse website, Arabtec said all shareholders are invited to participate in the rights issue, and “non-participating shareholders would be diluted up to 24.53 per cent.”

The rights issue to raise Dh1.5 billion is fully committed by Aabar Investments, Arabtec’s largest shareholder. It will be followed by a capital reduction programme, which will include cancelling up to 4.6 billion shares.

In addition to the recapitalisation programme, Arabtec said it has developed a three-year road map to reposition itself to deliver profitable growth. The first phase will stabilise the business in 2017, the company said, while the second phase will prepare the business to grow, and third phase seeks consistent growth in net profit.

“Arabtec acknowledges the disappointing losses incurred for the financial year, and our group’s approach to prudent financial management — specifically in addressing impairments from high risk items — provides our shareholders with demonstrable steps in securing visibility on the future of our business and reinvigorating the group,” said Hamish Tyrwhitt, group chief executive officer of Arabtec.

In its statement, Arabtec also said it will hold its annual general assembly on April 18.

Arabtec share prices ended 0.69 per cent lower on Wednesday to reach Dh0.858.

Staff Report

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