Wednesday, Jun 28, 2017

Dubai

Arabtec’s share prices dropped as much as 9 per cent on Wednesday on the first day of trading after the company’s capital reduction became effective. It was the largest daily decline in almost two months.

Share prices ended the day 8.33 per cent lower at Dh2.75. Share prices during the previous trading session closed at Dh0.89, but were repriced on Wednesday to Dh3.03 to reflect the reduction in the company’s capital from Dh6.1 billion to Dh1.5 billion, a move which took 4.6 billion shares off the bourse.

The capital reduction measure is part of the company’s recapitalisation programme, which aims to turn around financial performance and extinguish nearly Dh4.6 billion in accumulated losses.

The programme started with a Dh1.5 billion rights issue launched in mid-May that was fully subscribed by the company’s largest shareholder, Aabar Investments. At the time, the move increased Arabtec’s share capital to Dh6.1 billion from Dh4.6 billion.

In a statement on Wednesday, Arabtec confirmed it has completed its recapitalisation programme and extinguished Dh4.6 billion in losses.

“This has now strengthened the group’s financial and liquidity positions but also provided a solid foundation for growth. We have now concluded the main objective in Phase 1 of our strategic road map, to stabilise the business,” said Hamish Tyrwhitt, the group’s chief executive officer.

Arabtec said in its statement the completion of its recapitalisation programme, along with the company’s focus on implementing a strong risk management process, “positions the company to capitalise on the positive outlook of the construction and engineering sectors in its key geographies.”

Arabtec’s shares were among the most actively traded on the Dubai Financial Market (DFM), and accounted for 16 per cent of the market’s total traded values, though with weak liquidity on Wednesday, just Dh30 million worth of shares changed hands.

By Sarah Diaa Staff Reporter

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