After the decision of the general assembly to dissolve and liquidate the company
Two analysts: Two scenarios for «Arabtec» .. «liquidation» or «strategic investor»
Arabtec is a company operating in the real estate sector.
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The decision of the General Assembly of «Arabtec Holding Company», at the beginning of this October, to dissolve and liquidate it, a shock in the local capital markets, especially by the small investors of its shareholders, who await possible scenarios in the face of the company’s situation.
Two financial analysts agreed in an interview with Emirates Today that there are two “scenarios”, not a third, awaiting Arabtec. The first relates to what was approved in the general assembly to liquidate the company, while the second solution is the possibility of entering a strategic investor, but they disagreed on the opportunity of any of them in Application to the company.
Historical precedent
Financial expert Waddah Al-Taha said that there are two scenarios, no third, for Arabtec. The first is the entry of a strategic investor during the period of time that the general assembly gave to the company's board of directors to inform the stakeholders of the company’s liquidation, while the second scenario is the final liquidation of the company, declaration of its bankruptcy, and its exit from The market is final.
Al-Taha believed that the first scenario is the closest to verification for several considerations, including that the liquidation decision taken by the company is considered a historical precedent, and it is not possible to implement it in our financial markets. It is also possible that the liquidation of the company has repercussions on the financial sector, given that Arabtec is a large company. And it has financial links with a number of banks, in addition to the importance of the sector in which the company operates, which is the real estate sector, which is considered one of the vital sectors for the Emirate of Dubai and the UAE in general.
Al-Taha continued: “The second scenario of liquidation is close to verification as well, but to a lesser degree than the previous one, due to considerations including authorizing the general assembly, the company's board of directors to actually liquidate, then the company's board chairman declaring that its situation is not solvable, and that is within the statement in which it announced The decision to dissolve and liquidate, as well as the financial challenges that could meet the company, ”indicating that the current liabilities that are obligations payable within a year or less amounted to 9.12 billion dirhams, and according to the last published balance sheet on June 30, the liabilities (liabilities) are greater From assets (assets).
The trend towards liquidation
For his part, the chief executive of strategies and customers in "Abu Dhabi Capital Company Ltd.", Muhammad Ali Yassin, agreed that there are two scenarios for the company: the entry of a professional strategic investor, or the declaration of bankruptcy and exit from the market.
Yassin said that he is inclined towards the second scenario related to the liquidation of the company, as it is the closest to verification, pointing out that the major shareholders of the company announced it clearly in the general assembly in which the voting rate reached 98%.
Al-Yaseen ruled out the entry of a strategic investor, given the company's financial position and its exposure to many banks, adding that it is a proposed scenario in the event that a third party intervenes in the matter, to solve it before its expansion.
Al-Yaseen stressed the need for the continuation of the "stock" to remain suspended from circulation until the picture becomes clear, and he called for more transparency.
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