Drake & Scull International Kicks Off Capital Increase For Restructuring

The commencement of the subscription process for Drake & Scull International's (DSI) capital increase marks a significant milestone in the company's restructuring journey. Starting today, the process will run until 10th May 2024, aiming to bolster the company's future growth and liquidity by raising AED600 million through the distribution of 2.4 billion shares. Shareholders are offered an opportunity to subscribe to new shares at a discounted rate of 25 fils per share, a move designed to benefit both the company and its shareholders alike.

Eligible shareholders, whose names are registered in the company's share register with the Dubai Financial Market (DFM) by 24th April 2024 and who possess a DFM-registered Investor Number (NIN), can subscribe through Emirates NBD's main offices across the UAE and Commercial Bank of Dubai branches in Abu Dhabi, Dubai, and Sharjah. This capital increase is one of the final steps in DSI's comprehensive restructuring plan, approved by its general assembly on 1st April 2024, following the board of directors' proposals.

Shafiq Abdelhamid, Chairman of DSI's Board, expressed gratitude towards shareholders for their patience and support since 2018. He highlighted the challenging journey undergone to reach this pivotal stage, which will enable DSI to resume its market activities. Abdelhamid emphasized that the restructuring plan was meticulously designed to avoid liquidation while safeguarding shareholders' interests and ensuring business continuity for better creditor returns than liquidation scenarios would allow.

The restructuring strategy includes writing off 90% of financial and trade creditors' claims, with the remaining 10% settled through Mandatory Convertible Sukuks issued to creditors with balances over AED1 million. These Sukuks will convert into shares after five years, aiming to strengthen DSI's equity position and shareholder value.

Furthermore, this capital increase is set to support DSI's recapitalisation efforts and enhance liquidity. The raised funds will be pivotal for accessing bank guarantees essential for securing new projects and completing ongoing ones. Additionally, it will provide necessary capital for business operations and settling other obligations.

With trading in DSI's shares expected to resume on 21st May 2024, following Securities and Commodities Authority regulations limiting subscription to current shareholders, this capital increase is a critical component of DSI's strategy to rejuvenate its project portfolio and continue contributing to the national economy while boosting confidence in the financial market.

With inputs from WAM