DSI turnaround drive gains traction

Ahmed Khilani, CEO, Tabarak International; Wael Allan and Feras Kalthoum, during the Press conference in Dubai.

Drake & Scull International, a Dubai-based contracting company that has embarked on a capital-restructuring programme, announced on Sunday that Tabarak Investment had acquired majority shares of its former chief executive officer.
Wael Allan, CEO of DSI, said with Tabarak Investment's support, the company would "aggressively continue to execute" its turnaround strategy and undertake key business transformations and strategic initiatives in collaboration with all our stakeholders.
"I would like to reassure all our shareholders that the new management team is fully dedicated and geared to prepare a new phase of financial and operational recovery," said Allan.
At a Press conference, Allan said despite the short-term challenges, DSI is well positioned to benefit from its leadership position in the MEP sector and to secure profitable projects in the UAE market in the near future.
He said Tabarak's acquisition of majority shares of Khaldoun Tabari, former CEO, reaffirms the investment firm's commitment to DSI and the promising outlook of the company upon completion of the capital-restructuring program, which was approved by the shareholders in May.
The capital restructuring involves cancelling 50 per cent of its 2.28 billion shares of DSI to cut its liabilities by Dh1.14 billion - the equivalent of 115 per cent of the company's accumulated losses.
The company continues to review and optimise its organizational structure by merging and integrating core functions across operating segments to reduce overheads, streamline costs and to improve the bottom line performance, he said.
DSI concluded a series of key management appointments at both corporate and subsidiary levels and the new management team has been recently complemented with the appointment of Feras Kalthoum as acting chief financial officer of the Group.
The company advanced with the capital restructuring program and received from the Securities and Commodities Authority (SCA) further instructions to proceed with the final regulatory preparations in order to fulfil the approval requirements and to initiate the 75 per cent capital reduction.
Phase 1 (capital reduction) of the capital restructuring program is expected to be completed within six to seven weeks. Upon completion of phase 1, the Company will instigate the execution of phase 2 (Capital increase) of the program, which includes the ADh500 million capital increase to accelerate the entry of Tabarak Investment as a major strategic investor in DSI.
The initial projected timeline of the capital restructuring program has been deferred by a period of one month and the company now expects to complete the program by the end of third quarter 2017.
Feras Kalthoun, acting CFO, DSI, said the completion of the capital restructuring program is essential to resolving the liquidity challenges of the company and to rebalance the capital structure of the Group.
"I look forward to being part of the new management team assigned to stabilize the business and resolve the Group's financial challenges."
"Our immediate priority is to plug-in our working capital deficit; improve collection to shore-up liquidity."
"Our short-term goals are to streamline our business, bolster liquidity, optimize governance and transparency, and secure high-potential projects. The UAE market remains buoyant and we expect to progress steadily with our turnaround strategy throughout the second half of the year."
Ahmed Kilani, CEO, Tabarak Investment, said the acquisition of Tabari's shares is a voice of confidence in the DSI brand and the longstanding track record of the company particularly in the MEP sector in the UAE. "The strategic synergies between DSI and Tabarak will be pivotal to the success of the turnaround strategy set forth by the Company earlier this year."
He said Tabarak is optimistic about the prospects of DSI in the long term and is keen on the completion of the capital restructuring program "to assist the company during this challenging time, yet promising outlook." - issacjohn@khaleejtimes.com