By: Mahmoud Gamal
Dubai – Mubasher: Drake & Scull International’s (DSI) stock rose 1.1% on Wednesday on the back of an announcement that the company will carry out a restructure scheme.
By 12:10 pm UAE time, DSI’s stock reached AED 0.445 after 8.26 million shares were traded at a turnover of AED 3.69 million.
DSI’s announcement of the details of its restructure will bring back investor confidence, analyst Mahmoud Ziad told Mubasher in a comment on DSI’s performance.
Earlier on Wednesday, DSI said its general meeting will convene on Thursday, 27 April, to discuss the details of the revamping process, in which the board proposed a capital reduction by 50% or AED 1.143 billion.
“The reduction of the share capital will be on a pro-rata basis through the cancellation of [roughly 1.143 billion] shares and will apply to all shareholders of the company,” DSI said in a statement to the Dubai Financial Market (DFM).
Following the capital cut, DSI’s revised share capital will amount to AED 1.143 billion.
The board’s recommended capital cut exceeds the company’s accumulated losses, comprising 115% of the total value of the losses, DSI said, noting that the surplus resulting from the reduction will be added to the retained earnings account.
News of DSI’s capital restructure is “good news” for investors who are “stuck” on the stock, Ziad told Mubasher, noting that this revamp will provide shareholders with fewer losses.
From a technical perspective, capital market analyst Hamed Al Onkary told Mubasher that DSI’s stock will be targeting AED 0.5 and AED 0.55 as a second target.
DSI last reported AED 991.553 million in accumulated losses for 2016.
Translated by: Nada Adel Sobhi
