Dubai’s Drake & Scull says it has not hired adviser to seek investment

Dubai-listed builder Drake & Scull International has not hired a legal adviser to help to bring a strategic investor into the company, it said on Wednesday.

“The company denies the appointment of any legal adviser in connection with bringing in a strategic investor or issuance of mandatory convertible bonds,” the company said in a brief statement to the Dubai stock exchange.

“The company will make appropriate disclosures, when such material development comes into effect.”

The statement was issued after the company’s chief financial officer, Kailash Sadangi, told Reuters on Monday that Drake & Scull had asked advisers for proposals to review its business and find strategic investors.

Read more: Dubai contractor Drake & Scull seeks new investors

Sadangi also said at the time that the company had appointed a legal adviser to hold discussions with the UAE stock market regulator, the Securities and Commodities Authority, on the possibility of bringing in strategic investors and regulatory approvals that would be needed.

An issue of mandatory convertible bonds is among options being considered and Drake & Scull has made a strategic decision to withdraw gradually from its civil engineering business in Saudi Arabia, Sadangi added. Mandatory convertibles must be changed into underlying shares by a specific date.

Like many other Gulf construction companies, Drake & Scull has been hit by an economic slowdown in the region because of low oil prices. In mid-August it reported a second-quarter net loss of Dhs207.6m ($57m), compared with a profit of Dhs10.3m a year earlier.

In its statement on Wednesday, the company did not comment on its business review beyond saying: “Drake & Scull, in its normal course of business, engages consultants, advisers to review its strategy, operations and provide financing solutions for its operations.”