Drake & Scull International shares up by 24% as trading resumes

Alamy via Reuters

• DSI share price up a quarter
• Trading was halted in 2018
• Relisting sold $123m of shares

Shares in Drake & Scull International rose by 24 percent on Wednesday as the troubled contractor resumed trading on Dubai Financial Market following a six-year suspension.

DSI stock ended Wednesday at AED0.31, having started the day at AED0.25 – the price at which it sold AED450 million ($123 million) of shares earlier this month as part of a company restructuring.

The company previously raised AED1.2 billion in a 2008 initial public offering priced at AED1 per share that sold 55 percent of its stock.

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Trading in DSI’s stock was halted in 2018 after its losses exceeded 75 percent of its capital.

Following a heated legal battle that almost resulted in the contractor being liquidated, creditors and shareholders approved a restructuring plan last April and a court formally cleared it in November.

The plan included the write-off of 90 percent of debts while the remaining 10 percent would be funnelled into a sukuk, or sharia-compliant bond.

A bourse filing on Monday said DSI has a project backlog estimated to be worth AED638 million ($173 million), which is to be completed from this year through to 2028.

• DSI claims bumper revenues to come before it resumes trading
• Bahrain tops dividend yields in mixed quarter for bourses
• Drake & Scull unit to oversee $210m Saudi water project

“It is important to highlight that the operations are being depleted due to the inability to win new projects as well as the significant liabilities on its books,” the bourse statement said.

Nevertheless, the company is projecting revenues of AED315 million this year and for that to hit more than AED3 billion by the end of 2029. It is due to relaunch operations in the third quarter.