Dubai – Mubasher: Arabtec Holding on Thursday revealed updates for its recapitalisation programme through which it aims to raise AED 1.5 billion in equity and extinguish its accumulated losses.
The programme involves a rights offering to raise AED 1.5 billion by issuing new shares at AED 1 per share, Arabtec said in a filing to the Dubai Financial Market (DFM).
The three-year restructure programme announced in March will help “strengthen the group’s financial position,” according to the statement.
Arabtec’s accumulated losses reached AED 4.66 billion, representing 101% of the company’s issued capital, while total liabilities exceeded total assets by AED 250.7 million.
The new capital will be raised to meet financial obligations including financing the completion of ongoing projects, supporting the management’s business plan as well as providing “financial flexibility to pursue growth opportunities,” Arabtec highlighted.
The Dubai-listed construction company will authorise the board “to apply statutory reserve to offset any of the group’s losses” in fiscal year 2017, the statement showed, noting that statutory reserves stood at AED 148.2 million as of 31 December 2016.
Following the rights issue, the company’s capital will rise to AED 6.115 billion from its current AED 4.615 billion. Moreover, Arabtec is planning to cancel up to 4.615 billion shares on a pro-rata basis to extinguish its accumulated losses, bringing capital to AED 1.5 billion, according to the statement.
The rights issue is open to all shareholders; however, non-participating shareholders will be “diluted up to 24.53%.”
The rights offering is “fully committed by Aabar Investments,” who is Arabtec’s largest shareholder.
The receiving bank for the issue will be the National Bank of Abu Dhabi (NBAD).
Last month, Arabtec’s board called for the annual general meeting (AGM) to be held on 18 April to discuss the programme’s updates.
Arabtec opened Thursday’s session 1.30% down to AED 0.91 by 10:19 am UAE time.
