Arabtec Holding to seek approval for annual general meeting over rights issue

Arabtec Holding’s board will meet on Sunday to discuss when it will next update shareholders on its turnaround programme, including a Dh1.5 billion rights issue to wipe out accumulated losses, the Dubai-listed contractor said yesterday.

This will be its third board meeting of the year.

The company is proposing a date on or around April 18 for its annual general assembly at which the recapitalisation update will be presented. The date for the AGM will need to be approved by regulators, Arabtec said in a statement to the Dubai bourse.

Arabtec has gained approval in principle from regulators for the recapitalisation – its second rights issue in four years.

The company wants to tap shareholders to erase Dh4.6bn losses over the past two years, including a Dh3.5bn net loss last year alone.

Arabtec blamed last year’s loss on “a combination of impairment charges on high-risk items, which amounted to Dh2.8bn in total, as well as recurring, non-recurring and operational expenses”.

The contractor has not yet set an offer price for the latest rights issue, which would initially increase the size of its capital base to Dh6.1bn from Dh4.6bn.

Following the fundraising it intends to then cancel Dh4.5bn worth of shares on a pro-rata basis to get rid of the losses.

Arabtec has confirmed that all shareholders are being invited to take part in the rights issue but the principal shareholder, Aabar Investments, which holds a 36.11 per cent stake, has agreed to take up its full entitlement and would also pick up additional shares should current shareholders opt not to take part in the issue.

The company unveiled earlier this month a three-step, three-year recovery plan aimed at winning support from shareholders for its fundraising.

Arabtec shares closed up 1.4 per cent at 92.7 fils on the Dubai Financial Market yesterday.

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