Arabtec, the Dubai based construction firm went through a major management shakeup last week. It is now relying on the reputation of its largest shareholder and will use the proceeds of a planned US$1.8 billion capital raise for expansion purposes.
These assurances were made by its new CEO amidst share price falls and worries over dilution of current shareholdings because of expanded interest by Aabar, the Abu Dhabi state investment firm. New CEO Hasan Abdullah Ismaik, who replaced founder and former CEO Riad Kamal, said the capital fund would come from a share issue as well as a convertible bond issuance.
Share prices fell by 9.8% after the announcement by the new CEO compounded by a previous 9.7% share price dip made the share values for Arabtec at an all time low. Its net profit for 2012 fell to Drh 139.2 million or US$37.90 million. In 2011, the net profits were at Drh221.1 million.
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