The shareholders of Dubai-listed contractor Arabtec, which helped build the Burj Khalifa (pictured), have voted to dissolve the company as the effects of Covid-19 have exacerbated its already dire financial situation.
Shareholders voted for the move at a special general assembly yesterday, and the company publicly confirmed the decision today.
It comes after Arabtec, founded in 1975, reported a net loss of AED 794 million ($213m) in the first half of 2020.Â
In his statement today, company chairman Waleed Al Mokarrab Al Muhairi referred to efforts by the company to "pursue legal and commercial entitlements".Â
"In recent years," he said, "limited liquidity in the construction sector has impacted the progress of Arabtec’s projects and this has been exacerbated by the effects of COVID-19. Despite efforts to pursue legal and commercial entitlements and a restructuring of the Company’s finances and operations, the situation in which Arabtec finds itself today is untenable."Â
Arabtec’s board had considered a number of strategic alternatives based on financial analysis by specialist restructuring firm Alix Partners, but none were considered viable.Â
Arabtec said its primary objective now was to provide stability for staff, subsidiaries, sub-contractors and suppliers.Â
"Shareholders have therefore voted to move forward with a plan of liquidation to maximise value for stakeholders through a controlled and efficient program," said Waleed Al Mokarrab Al Muhairi.Â
"Over the coming weeks, the company’s board and management will work closely with regulators and stakeholders to maximise value for all stakeholders. Our current priority is to ensure that everyone directly affected by this decision, is treated fairly during this challenging time."Â
The value of Arabtec Holding’s shares had more than halved in value this year before they were suspended on the stock exchange ahead of the shareholder meeting.
The resolution of the shareholders grants the Arabtec’s Board a maximum period of two months to allow for discussions with the main stakeholders before a liquidation application may be submitted to the competent courts.Â
Photograph: Arabtec was part of the consortium of heavyweight contractors that built Dubai’s Burj Khalifa, pictured (Wael Hneini/Unsplash)