Dubai-based contracting giant Drake & Scull International (DSI) is planning to reduce the cost of overheads as losses have reached nearly 5 billion dirhams ($1.3 billion).

In a bourse filing to the Dubai International Financial Market (DFM) on Monday, the company said it will also continue negotiating with banks and creditors to reach “comprehensive settlements”, as well as improve its overall “operational productivity and efficiency”.

The company’s accumulated losses as of December 31, 2020 have reached 4.902 billion dirhams, which now represent 458 percent of the capital.

Reasons for losses

The losses have been attributed to “significant provisioning” related to legacy projects in Oman, India and UAE. “As a result of poor performance on legacy projects, costs to hand over [them] went far beyond budgets whereby several bonds were liquidated, increasing the accumulated losses,” DSI said.

The company had earlier said it had undertaken a restructuring plan to improve its finances.

On Monday, Drake & Scull said that as part of its restructuring and business strategy, it will focus on writing off majority of its debt and raising new equity to gain new projects.

For the year ended December 31, 2020, the company recorded revenue of 182 million dirhams, down from 681 million dirhams in 2019.

(Writing by Cleofe Maceda; editing by Seban Scaria)

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