Arabtec Holding posts 2016 net loss of AED 3.5 billion; sets rights issue price at AED 1 per share.
Arabtec Holding (profile) has announced its 2016 financial results, showing revenue of AED 8.16 billion, a 7.1 per cent increase from 2015, and a net loss of AED 3.5 billion, compared to a net loss of AED 2.8 billion the previous year.
The company also said its backlog of existing and committed future projects stands at AED 18 billion, equivalent to more than two years of annual revenue, and said the spike in operating expenses was largely due to AED 1.9 billion of non-recurring impairment losses on receivables and other items.
Hamish Tyrwhitt, Group CEO of Arabtec Holding, said: “Arabtec acknowledges the disappointing losses incurred for the financial year… [but] we are confident that the combination of the recapitalization program and the strategic plan of the business will enable Arabtec Holding to capitalize on the long-term positive outlook for the construction and engineering sector in our key geographic markets.”
Recapitalization program
The Arabtec board has launched a recapitalization program to raise AED 1.5 billion in equity, extinguish accumulated losses on the balance sheet and ultimately secure the group’s sustainable and successful future. The program, the company said in a statement, consists of two steps:
- A rights offering to increase Arabtec’s issued share capital through the issuance of 1.5 billion new shares at an offer price of AED 1 per new share. The rights offering is fully committed by Aabar Investments, Arabtec’s largest shareholder. All shareholders are invited to subscribe, and non-participating shareholders would be diluted up to 24.53 per cent.
- A capital reduction exercise that extinguishes the accumulated losses as of December 31, 2016, by effectuating a cancellation, on a pro rata basis, of up to 4.62 billion shares of AED 1 each in the share capital of the company.
In addition to quelling accumulated losses, the recapitalization program will put the Arabtec group on an accelerated path to resuming dividend payments, the statement said.
The full statement is available here