Drake & Scull ‘will not sell stake in company’
Dubai, May 14, 2013
The chief executive of Dubai contractor Drake and Scull has no plans to sell his stake in the company, he said on Tuesday, but there will be more partnerships on projects with builder Arabtec.
Drake, which specialises in mechanical, engineering and plumbing (MEP), has seen its shares jump 35 percent year-to-date on growing speculation that it was a takeover target, with Arabtec viewed by analysts as a possible buyer.
Arabtec is on an expansion drive after a management shake-up led by Abu Dhabi state fund Aabar, its largest shareholder.
"I have heard the speculation," Drake Chief Executive Khaldoun Tabari said on the sidelines of a conference in Abu Dhabi.
"I am not interested in selling my stake. Our shares are out in the market and our company is doing well. We have always worked closely with Arabtec and will continue to do so. You are going to see more announcements of us working closely with Arabtec."
He attributed the increase in share price to the company's performance this year.
"Our turnover has increased by 25 to 30 percent."
Tabari owns about 44 percent of Drake directly and through other companies.
The construction sector in the region is gradually picking up after nearly three years of slow growth following a global slowdown and the collapse of Dubai's property boom.
He said the results of a bid for MEP work at the Midfield Airport Terminal project in Abu Dhabi, currently under construction, would be known in a few days.
"We don't rule it out," said Tabari, when asked if Drake would secure this contract.
The tender is valued at around 500 million dirhams ($136.1 million).
The contractor in total is currently bidding for projects worth about 15 billion dirhams, Tabari said. It is active on projects in Gulf countries including the UAE, Saudi Arabia, Qatar and Kuwait and has also worked in other countries like Egypt and India.
The company's current backlog of orders exceeds 10 billion dirhams, he said. – Reuters