The subscription process for Drake & Scull International capital increase commenced today and will end on 10th May 2024, which is considered one of the final steps to complete the restructuring process.
The capital increase is set at AED600 million, distributed over 2.4 billion shares, and will support the company's future growth and liquidity needs. The company's shareholders will also benefit from subscribing to the new shares at a discounted price of 25 fils per share.
The subscription process will take place through the main offices of Emirates NBD across the UAE, in addition to the branches of Commercial Bank of Dubai in Abu Dhabi, Dubai and Sharjah.
To participate in the capital increase, shareholders must ensure that their names appear in the company's share register maintained with the Dubai Financial Market (DFM) by the end of DFM working hours on the entitlement date of 24th April 2024. In addition, they must possess an Investor Number (NIN) registered with DFM to be eligible to subscribe to the new shares.
The company was able to complete all the requirements aimed at its restructuring, as its general assembly, which was held on 1st April 2024, approved the proposals of its board of directors aimed at restructuring it and increasing its capital.
Following the requirements of the Securities and Commodities Authority, the subscription will be limited to the company's current shareholders. It is expected that trading in the company's shares will resume on 21st May 2024.
Shafiq Abdelhamid, Chairman of Drake & Scull International, expressed gratitude to shareholders for their support during challenging times and outlined a capital restructuring plan to prevent liquidation. The plan aims to protect shareholders' interests, ensure business continuity, and provide better returns for creditors. It involves writing off 90% of financial and trade creditors' claims and settling the remaining 10% through Mandatory Convertible Sukuks. These Sukuks will convert into shares after five years for creditors with balances over AED1 million, aiming to revive DSI's operations and boost confidence in the financial market.
Following the capital restructuring, the company aspires to strengthen its portfolio of projects and complete the current project portfolio.
On the other hand, writing off liabilities will lead to capital gains that will positively affect shareholders' equity, while the Mandatory Convertible Sukuks will further enhance the equity position.
At the same time, the capital increase will support the recapitalisation process and enhance the company's liquidity. The cash will be used to enhance access to bank guarantees, which are considered a pivotal basis for winning new projects and completing current projects; funding business operations; and settling other obligations.
News Source: Emirates News Agency
