Tuesday 11 December 2018

Arabtec eyes $408m rights issue as 2016 loss widens

DUBAI, February 13, 2017

Arabtec Holding, a leading construction company in the Middle East, is planning to raise Dh1.5 billion ($408 million) from a rights issue after posting a second yearly loss in 2016, according to a report.

This has widened to Dh3.41 billion ($925 million) from the previous year's loss of Dh2.35 billion ($640 million), reported Bloomberg, citing a company statement.

Arabtec pointed out that the loss was due to the impairment charges on high-risk items, recurring, non-recurring and operational expenses.

These results reflect adverse market conditions, which are having a negative impact on the construction industry across the GCC region, according to the UAE builder.

The mean estimate of eight analysts was for a loss of Dh580 million, according to data compiled by Bloomberg. However, revenue has climbed 5.5 per cent to Dh7.7 billion.

On its new rights issue, Arabtec said it is aimed at reducing share capital through a pro-rata cancellation of shares to wipe out accumulated losses to help the raising of new equity.

The company’s largest shareholder Aabar Investments has committed to fully subscribe to its portion of the rights issue and any unsubscribed shares up to Dh1.5 billion, said the report.

The money raised from the rights issue will be used to fund the ongoing projects, support management’s business plan and provide financial flexibility to pursue growth opportunities, it added.

Tags: Arabtec | loss | contractor | builder |

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