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By Tom Arnold and Hadeel Al Sayegh
DUBAI, April 6 Dubai's Drake & Scull
International (DSI) plans to begin talks with banks in May about
its existing debt and seek financial backing for new projects,
Chief Executive Wael Allan told Reuters on Thursday.
The builder has sent non-disclosure agreements to its
lenders and will continue to do so until mid-April, Allan said
in a phone interview.
DSI aims to discuss the rescheduling of payments on existing
debt in light of slower market conditions, and to seek support
for its 2017-2021 business plan, he said.
The company will also seek support for bonding facilities,
which are financial tools such as bid bonds or performance bonds
related to construction projects, and cash facilities to back
new projects, he said.
DSI appointed PricewaterhouseCoopers in December as a
strategic and financial advisor to assist with "examining the
company's capital structure and financial liabilities".
Allan's comments come after sources told Reuters DSI had
distributed non-disclosure agreements to its major lenders this
week to discuss its strategy and recapitalisation plans.
The company has faced a depressed Gulf construction market
as governments rein in spending on infrastructure due to lower
It has reported worsening earnings in nine of its last 11
DSI reported a 2016 net loss of 786.9 million dirhams and in
February proposed reducing its share capital by up to 50
It also proposed a rights issue of 500 million dirhams in
equity to a strategic shareholder.
The company has a $120 million Islamic bond which matures in
2019. The sukuk was issued in 2014 and underwritten by Al Hilal
Bank, Emirates NBD, Mashreq and Noor Bank.
DSI announced in November it was reviewing its business to
address market challenges which could lead to a withdrawal from
some markets, retrenching on civil works in Saudi Arabia and a
more conservative stance on recovering certain receivables.
(Editing by Jason Neely)