| DUBAI, April 17
DUBAI, April 17 Dubai-listed Arabtec Holding
, which reported accumulated losses of 4.6 billion
dirhams ($1.25 billion) last year, is asking banks to waive
terms on its debt, two banking sources with direct knowledge of
the matter told Reuters.
The building company has been in talks with its main
creditors over the past month to waive the right for banks to
call in facilities extended to the business, said the sources,
who declined to be identified because the matter had not been
The waiver request comes as Arabtec seeks to ensure that the
proceeds of a planned 1.5 billion dirham ($408.4 million) rights
issue will go to the company rather than be used to settle its
liabilities, one of the sources said, adding that Arabtec will
no longer be in breach of debt covenants after the rights issue.
Loss-making Arabtec had said in its 2016 financial statement
that it was "in breach of certain debt covenants".
Some of the banks have provisionally agreed to Arabtec's
request to waive terms on its debt, the source said.
In a statement to Reuters on Monday, Arabtec said: "In line
with the DFM’s (Dubai Financial Market) transparency
regulations, any material corporate development will be
disclosed to the market."
It did not elaborate further.
Arabtec has been grappling for more than two years with a
depressed market for infrastructure projects in the Gulf, with
its problems exacerbated by internal disagreements among
shareholders and several senior management changes.
At the end of 2016 its total debt stood at 2.46 billion
On Monday Arabtec confirmed a Reuters report that Peter
Pollard had been appointed as group chief financial officer and
will oversee the company's recapitalisation programme.
Arabtec is due to hold its shareholder meeting on Tuesday,
when it will seek investor approval for the rights issue.
($1 = 3.6730 UAE dirham)
(Editing by David Goodman)