Drake & Scull International has disclosed accumulated losses of more than five billion dirhams, equivalent to 467.7% of its capital of approximately one billion dirhams.
This came in a statement sent by the company to the Dubai Financial Market yesterday, in which it also outlined procedures for handling these losses.
The company explained that the accumulated losses amounted to 5005 million dirhams, constituting 467.7% of its capital of 1071 million dirhams.
She indicated that the main reasons that led to the achievement of these accumulated losses are the allocations for the projects under implementation, and debits in old projects in Saudi Arabia, Qatar, Oman, India and the UAE, where they were kept in the balance sheet despite the reservations of the external auditor, since 2016 on the possibility of recovering them. In addition to the write-off of the full value of the goodwill and trade name, on December 31, 2018.
She added that the project delivery costs exceeded budgets a lot due to poor performance, as many guarantees were liquidated, which increased the accumulated losses.
According to the statement, the company specified the measures that will be taken to address the accumulated losses, indicating that it will develop a restructuring plan, and a work plan that includes focusing on completion and delivery of old projects and refocusing on the core activities to win new projects.
She also indicated that she would complete negotiations with banks and commercial creditors with a view to reaching a settlement, as well as pursuing legal issues against the previous administration, and to enhance productivity and operational efficiency.
This is the third disclosure for companies listed on the market, in which it announces its accumulated losses and specifies ways to address it, in implementation of the Securities and Commodities Authority’s decision, which obliges each company with accumulated losses of 20% or more of its capital, to disclose a plan to address the losses.