Drake & Scull International (DSI) has secured an interest-free qard al-hasan loan of up to $27.2m from Tabarak Investment.
The loan will be used to meet the UAE-headquartered construction giant’s immediate working capital requirements as it completes the first phase of its capital restructuring programme.
This programme will include a capital increase of $136.1m (AED500m) to expedite Tabarak Investment’s entry as a strategic investor, according to a missive issued by DSI to the Dubai Financial Market (DFM).
The withdrawal and payment mechanisms of the loan will be mutually agreed upon by the two parties, and could be implemented in tranches.
Wael Allan, chief executive officer of DSI, said: “Tabarak Investent’s loan is a key development that will further ensure the success of our efforts to direct DSI towards a new period of financial and operational success.
“We assure our stakeholders that our programme is proceeding according to plan, and will soon position us for further growth.”
Mohammad Atatreh, a board member at DSI, added: “The extension of this loan from Tabarak Investment will ensure business continuity, particularly by addressing our immediate working capital requirements under the initial phase of our capital restructuring programme.
“We appreciate Tabarak’s full support as we realign the company towards long-term financial stability and profitability.”
Ahmed Kilani, CEO of Tabarak Investment, commented: “Our loan is intended to ensure that DSI’s restructuring programme proceeds as smoothly and as swiftly as possible. We are fully committed to sustaining the company’s industry leadership and pursuing a mutually beneficial future.”
The initial phase of DSI’s capital restructuring programme is underway, and will see the firm’s capital reduced by 75% within the coming weeks.
DSI said the qard al-hasan loan would help to bridge its working capital requirements and improve its liquidity as it targets new contract awards.