Dubai's Arabtec reports first-half loss, seeks debt restructuring advisor

[DUBAI] Arabtec Holding, the UAE's biggest listed contractor, swung to a loss in the first half of the year, citing tight liquidity and limited new projects, and said it was seeking an advisor for debt restructuring.

The Gulf construction sector has slumped since a collapse in oil prices four years ago forced governments to cut spending, leading to a debt crunch at some companies that operate across the Middle East.

The coronavirus pandemic and the delay of Dubai's Expo 2020 world fair by a year to next October has worsened the industry's problems.

Arabtec, which helped to build the Louvre Abu Dhabi, said it was also hit by project delays and outstanding contractual claims.

The contracting firm on Sunday reported a net loss of 794 million dirhams (S$296.2 million) in the six months to June 30, down from a profit of 58 million dirhams a year earlier.

Total accumulated losses stood at 1.46 billion dirhams, Arabtec said, and "the group is negotiating and will soon engage with an advisory firm to assist management in a capital and debt restructuring exercise".

Two sources familiar with the matter said Arabtec is in talks with AlixPartners and Alvarez & Marsal.

Arabtec, AlixPartners, Alvarez & Marsal did not respond to requests for comment.

This will be the third restructuring exercise for Arabtec in the last four years. It hired AlixPartners in 2016, and Moelis & Co in 2018.

The Dubai bourse suspended trading of shares in Arabtec shortly after its disclosure for not providing its full financial statement.

Arabtec said the impact of the pandemic has resulted in reduced progress on projects and led to additional costs.

REUTERS