Dubai Construction Firm Drake & Scull's Year to Financial Renewal

02 Nov, 2023

Dubai Construction Firm Drake & Scull's Year to Financial Renewal

Dubai's Drake & Scull International Granted 12-Month Reprieve for Financial Turnaround

In a significant turn of events, Dubai's construction services firm, Drake & Scull International, has been given a lifeline with a 12-month window to execute a comprehensive financial turnaround plan. This decision follows the Dubai Court of Appeal's endorsement of the company's assertion that their restructuring strategy is feasible. The case of Drake & Scull has been a protracted legal battle in the UAE, with a recent ruling calling for the company's liquidation.

However, the Court of Appeal has now overturned this verdict. In a pivotal move, it also ordered the suspension of all legal proceedings against the company and its subsidiaries, as well as the halting of any execution procedures.

Drake & Scull released a statement announcing the court's decision, stating, "The Court granted the Company and its subsidiaries a period of 12 months to implement the restructuring plan, starting from the date of determining the final list of creditors. This period increases according to the progress of the restructuring procedures and the necessity of the situation at the time."

This 12-month window not only provides Drake & Scull the opportunity to focus on their financial turnaround but also allows the company's owners to pursue financial claims against the previous management through local courts. Additionally, the firm has made progress in renegotiating repayment terms with its creditors.

For Drake & Scull, this verdict represents a critical moment, preventing it from going down the same path as Arabtec, once one of the largest construction companies in the Middle East, which eventually went into liquidation.

In 2018, Drake & Scull uncovered significant discrepancies between the financial statements presented by the previous management and the actual financial health of the company. The accumulated losses stood at a staggering Dh4 billion.

Shafiq Abdelhamid, Chairman of Drake & Scull International, expressed relief after the court's decision, emphasizing his commitment to restoring the rights of shareholders who had been adversely affected by the prior management's decisions.