Drake seeks passage to India to capitalise on spending boom

Dubai company in talks to link with partner or family firm.

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Drake & Scull, the construction and engineering firm based in Dubai, is looking for a partner in India as it seeks to capitalise on the country's growing market. The company is in talks with "three or four" companies in India, where the government has set aside US$365 billion (Dh1.34 trillion) for infrastructure spending this year alone, said Khaldoun Tabari, its chief executive.

"We are looking at an entry point, either a joint venture with a company or to organically grow with a family company in India," he said. "There are a lot of projects there now." Drake & Scull has been rapidly expanding overseas in order to beat the downturn in the UAE, where it is owed about Dh1bn by clients. Contractors have struggled to collect on debts as developers deal with tighter liquidity, although Mr Tabari said that "things have improved" compared with a year ago.

"Everyone is having trouble getting paid," he said. "But now people don't venture into a building project unless they know where the money is coming from." Closer to home, Drake will spend Dh700 million to buy Saudi Arabian companies - a mechanical, engineering and plumbing business as well as a civil-works firm. Both acquisitions are expected to be finalised by early next quarter. The acquisitions will be 50 per cent funded by the company's own cash, while the rest will be borrowed from banks.

"Our treasury is working with banks to put a financial package in place," said Mr Tabari. Drake, which this week won Dh240m worth of contracts in Abu Dhabi, is also on the verge of being awarded a civil works deal for a 40-storey building in Jeddah, said Mr Tabari. The new contracts will help to boost the company's project backlog to an estimated D6bn by the end of this year. Its order book totalled Dh4bn at the end of the first quarter, compared with Dh2.7bn at the same time last year.

It is also awaiting news on Dh5.5bn worth of bids in Abu Dhabi. "It's an 18-month process in Abu Dhabi, from the time you bid until ground-breaking," said Tawfiq Abu Soud, an executive director at Drake. "We're still waiting for a decision from clients on what we bid for last year." @Email:agiuffrida@thenational.ae