Drake & Scull fires CEO, CFO and chief legal officer as losses widen

Company to be managed by executive committee until new chief executive and chief financial officer are appointed

DSI board approved the termination of its CEO, CFO and CLO as the company continues with its restructuring. Rich-Joseph Facun / The National

Dubai contractor Drake & Scull fired its top management in another shakeup at the company undergoing restructuring as it said losses widened further last year.

DSI board of directors approved firing its chief executive officer Tawfiq Abu Soud, chief financial officer Khaled Jarrar and chief legal officer Mohamed Ghanem, the company said in a filing to the Dubai Financial Market on Thursday. Mr Abu Soud had been appointed group chief executive in January.

The contractor will be managed by an executive committee comprised of three executive managers until it hires a new CEO and CFO, DSI said. The board of directors approved appointing Fadi Saba as chief legal officer and board secretary.

In a separate statement to the bourse, the company which was suspended from trading in November, said on Thursday it realised a net loss of Dh4.5 billion last year widening from 1.18bn in 2017. The loss is mainly "due to allowance against expected credit losses...and impairment of goodwill." The contractor said revenue declined 70 per cent to Dh798 million last year from 2017. Earlier this month the board had received approval of shareholders to sell some of the assets of the Dubai-listed contractor as it tries to narrow losses amid an ongoing restructure.

The engineering and construction contracting company appointed restructuring advisers in November last year, after posting a net loss of Dh498m for the three months to September 30, compared to a net loss of Dh181m in the previous quarter.

DSI had appointed Tussbridge Advisory as financial adviser, and law firms Allen & Overy and Al Tamimi & Company as legal advisers, to oversee the development of a new business plan. The appointments are part of continued restructuring efforts launched two years ago to stabilise the business, which had fallen on hard times amid a softer property and construction sector in its core UAE market on the back of the three-year oil price slump that began in 2014.

The team of advisers "working with our newly formed restructuring committee, will not shy away from taking the tough decisions necessary to refocus the business and, with support from our many stakeholders, restore the company to financial health”, DSI said in September.

Since 2016-17, DSI has been scaling down its operations as it tries to get rid of its non-performing business streams.

"Looking ahead our main focus will be to restructure our debt and equity for which a comprehensive plan is in progress," the company said on Thursday.