Dubai: Arabtec Holding, the Dubai-listed construction firm, outlined on Thursday a detailed recapitalization plan.
In an investor presentation posted to the Dubai Financial Market website, Arabtec said its plan includes three phases over 2017 and the next two years, and should see Arabtec securing an annual backlog of new projects of at least Dh8 billion to Dh9 billion from 2018.
The company's recapitalization plan, first announced in February 2017, would erase its current liabilities. The company says it is commited to returning to profitability, but declined to state a timeline for doing so.
According to the statement on DFM, the company expects consistent growth in net profit from 2019. Arabtec has posted losses for the previous two years.
In the first phase, the company will implement its recapitalization programme, dispose of non-core assets, resolve legacy project claims, and implement a strong risk management approach.
In the next one in 2018, Arabtec said it plans to secure new projects, recycle capital, and ensure on-time and on-budget delivery of projects.
The company is then targeting growth in 2019, which will also see a return to dividend distribution.
Thursday’s announcement did not do much to prop up share prices, however, with shares down 0.89 per cent in the first half hour of trade. Shares were not among the most actively traded either, and remained below the Dh1 mark, at Dh0.895.
The presentation comes after Arabtec announced in mid-February it plans to reduce its capital and launch a Dh1.5 billion rights issue as it reported its ninth consecutive quarter of losses. The company’s net loss in 2016 reached Dh3.4 billion, widening from the Dh2.35 billion recorded a year earlier.
