Drake & Scull Completes AED 450 Million Capital Increase, Exceeding Restructuring Minimum

Drake & Scull International PJSC, a global construction industry leader, has successfully completed a capital increase of AED 450 million, surpassing the minimum amount required for its restructuring plan. The subscription process, which ran from April 25 to May 10, 2024, will support the company's business growth and future projects in the UAE and GCC regions.

Why this matters: This capital increase is crucial for Drake & Scull's restructuring efforts, which will have a ripple effect on the UAE's construction industry and economy as a whole. The company's recovery will also impact its employees, suppliers, and stakeholders, making this a significant development in the region's business landscape.

The company's new capital will total AED 2,887 million, distributed over 2,887 million shares. The subscription price was set at 25 fils per share, representing a 75 fils discount from the par value. Drake & Scull plans to use the net proceeds from the capital increase to enhance working capital, support capital expenditures and operations, and finance future growth and potential acquisitions.

Eng. Shafiq Abdelhamid, Chairman of the Board of Drake & Scull International PJSC, commented on the successful capital raise, stating, "The success of the IPO will enable the company to regain its position in the markets of UAE, GCC and other regions around the world." He acknowledged the challenges ahead but expressed determination to restore the solid position that Drake & Scull enjoys in the construction sector.

The capital increase is a key component of Drake & Scull's restructuring plan, which aims to rebuild confidence by focusing on the company's core strengths and specialties. The plan involves writing off 90% of liabilities owed to financial and trade creditors and issuing mandatory convertible bonds that will convert into shares after 5 years for the remaining 10% of liabilities.

Several partners played crucial roles in the capital increase process. Emirates NBD Capital acted as the subscription lead manager, while Emirates NBD Bank served as the lead receiving bank. Trussbridge Advisory provided financial advisory services for the capital raise, and Ibrahim & Partners ("INP") served as the legal advisor.

Drake & Scull International PJSC is a global industry leader known for delivering state-of-the-art projects and solutions across its high-performance sectors, including electromechanical, integrated design, engineering, and construction for water, power, and oil and gas. The company has a long history of experience in electromechanical contracting, public health engineering, water and power contracting, general maintenance work, and project management.

The successful completion of the AED 450 million new capital marks a significant milestone in Drake & Scull's restructuring efforts. With the new capital, the company is well-positioned to regain its market leadership, support ongoing projects, and pursue new opportunities in the UAE, GCC, and other regions worldwide.

Key Takeaways

• Drake & Scull raises AED 450m in capital increase, surpassing minimum requirement.
• New capital totals AED 2,887m, distributed over 2,887m shares.
• Funds will enhance working capital, support operations, and finance growth.
• Capital increase crucial for company's restructuring efforts and UAE's construction industry.
• Drake & Scull aims to regain market leadership and pursue new opportunities.