“It’s been a very challenging and a tough road to recovery but I feel very triumphant that the team that I put in place have managed to keep the company stable until such time I managed to get the capital reduction done and secure the equity by Tabarak Investment,” Allan told Thomson Reuters Projects in a phone interview on Monday.
Allan was in charge of DSI for nine months. The former head of consultancy firm Arcadis’ Middle East operations, he was brought in to lead a turnaround of the company in October last year.
This involved bringing in Tabarak Investment to inject new capital into the business following a proposed share capital reduction that will see three-quarters of its share base cancelled with a view to extinguishing 1.7 billion UAE dirhams worth of historic losses.
DSI’s latest results showed that the construction firm’s losses narrowed by 12 percent year-on-year to 182.7 million UAE dirhams, despite contract revenue declining 18 percent to 660.3 million UAE dirhams during the quarter.
“I feel proud handing over the reins to Tabarak, who will inject 500 million UAE dirhams into the company, which is good proof of Drake & Scull’s capability and brand recognition,” Allan said.
“I wish Tabarak and the team the best to take the company to the next level.”
Neither DSI nor Allan commented on the reason for his departure.
Allan had replaced DSI’s longstanding chief executive and executive vice chairman Khaldoun Tabari.
DSI’s statement on Monday said it has also approved the resignation of Tabari, who recently sold his stake in the company to Tabarak Investment, and several other members of its board. Restructuring process
The company said that its capital restructuring plans are on track, and that it expects its capital reduction to complete by the end of the third quarter of 2017.
Following this, Tabarak Investment will subscribe to 500 million UAE dirhams worth of new shares, which will make it a majority shareholder in the company.
It said that Tabarak Investment, which is already the biggest single shareholder in DSI, had reaffirmed its commitment to the business, extending a 100 million UAE dirham interest-free loan to the company last week.
Acting chief financial officer Feras Kalthoum, who joined the business in June this year, said: “Our efforts to complete the capital and debt restructuring of the group, coupled with continued balancing of our portfolio to mitigate any contingent exposure that may impact our future profitability, will soon reflect positively on our financial performance and top-line targets.”
Thomson Reuters Projects reported in June that closer ties between the Tabarak and DSI
would put the building contractor in prime position to snap up lucrative work on some of Tabarak’s pipeline of projects, acting as a major catalyst for the loss-making firm’s turnaround plans.
Ahmed Kilani, CEO of Tabarak Investment, said one of the major assets where DSI could be in line to win work is Tabarak’s 10 billion UAE dirham Wahat Al Zaweya mixed-use development in the Faqaa corridor of Al Ain.
A note accompanying DSI's accounts statement on Monday by its auditor, PwC, stated that after reporting a loss of almost 1.04 billion UAE dirhams during the first six months of 2017, DSI’s current liabilities outweigh its current assets by just over one billion UAE dirhams.
Accounts show that the company’s net equity has declined to 217.6 million UAE dirhams by the end of June, down from 1.25 billion UAE dirhams at the end of last year.
Late on Monday, DSI announced it will elect a new set of board of directors during its upcoming General Assembly scheduled for later this year.
© Zawya Projects News 2017