Fresh Start for Dubai Contractor Drake & Skull International After Debt Restructuring

Dubai-based construction giant Drake & Skull International (DSI) has emerged from a five-year restructuring program after successfully writing off a significant portion of its debt. The company announced it had fulfilled all the requirements outlined in the restructuring plan, paving the way for them to pursue new business opportunities.

Shafiq Abdul Hamid, Chairman of the Board of Directors at DSI, confirmed the company's adherence to the restructuring agreement. This included issuing mandatory convertible sukuk (Islamic bonds) to creditors holding debts exceeding AED 1 million (US$272, 250). These sukuk will convert into company shares after a five-year period.

The restructuring plan also mandated DSI to increase its capital by more than AED 450 million (US$123 million) and gain approval from the Securities and Commodities Authority. The most significant aspect, however, was the substantial debt write-off. DSI successfully eliminated a staggering AED 4. 18 billion (US$1. 13 billion) of financial and commercial debt from its books.

This financial overhaul comes after DSI's trading on the Dubai Financial Market (DFM) was suspended for five years. The company's successful restructuring efforts culminated in its re-listing on the DFM on May 29, 2024.

Analysts believe this marks a turning point for DSI. With a clean slate and access to fresh capital, the construction firm is now poised to rejoin the race for new projects in the region's booming construction sector. DSI's experience highlights the challenges faced by many companies in the wake of the global economic slowdown. However, their successful restructuring plan serves as a testament to the resilience of Dubai's business environment and its ability to facilitate corporate turnarounds.

The full impact of DSI's debt write-off and its return to the DFM remains to be seen. However, the company's re-emergence after a period of financial turbulence signifies a renewed focus on growth and a vote of confidence in Dubai's construction market.

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