Arabtec Holding, a leading construction company in the Middle East, on Thursday outlined a major recapitalisation programme which will see the loss-hit company raise Dh1.5 billion (($408 million) through a rights issue as part of its new recovery plan.

A major part of the recovery plan includes sale of some non-core assets besides maintaining a backlog of new projects of at least Dh8 billion ($2.2 billion) and resume dividend distribution, said the company in an investor presentation posted on the Dubai Financial Market (DFM) website.

Arabtec said it has maintained a healthy backlog of Dh18.1 billion, of which 67 per cent is in the UAE. The company will also implement a strong risk management approach, it added.

The company will focus on "core competencies" in key Gulf markets as it looks to secure backing from investors for its latest turnaround plan.

Arabtec said the move is aimed at seeing a return to profitability from 2019 after more than two years of losses.

The Dubai builder's accumulated losses as of December 31, 2016 stand at an estimated Dh4.6 billion (including net loss of Dh3.5 billion recorded for FY 2016), subject to completion of FY 2016 audit.

In such a scenario, Arabtec said it was in need of new capital mainly to fund completion of ongoing projects, support management’s business plan, and provide financial flexibility to pursue growth opportunities.

Upon completion of the Rights Offering, the paid‐up capital of the group would increase from Dh4.6
billion up to Dh6.1 billion (subject to completion of FY 2016 audit), it added.

Arabtec said it comprises three operating entities and nine investment companies. "Delivering on integrated capabilities is a material competitive advantage and core focus area for the group," it stated in the investor presentation.-TradeArabia News Service