Drake & Scull International (DSI), a leader in engineering and construction services, said that it is targeting to issue a sukuk convertible into equity in the second quarter of 2018.

The announcement comes following a DSI board meeting yesterday (March 27) where the members gave approval for a plan to issue convertible sukuk with an indicative value of minimum Dh450 million  ($122.4 million) or the equivalent in other currencies, as private placement or public issuance to be converted to shares over a maximum period of five years, at a price of Dh3 per share or at a discount of 25 per cent of the market price of the share, to be determined at the time of conversion.

The sukuk issuance is subject to regulatory and shareholders’ approval at the company’s upcoming General Assembly meeting, which is scheduled to convene in April 2018.

Rabih Abou Diwan, the investor relations director, Drake & Scull International, said: "The sukuk issuance comes within the framework of the strategic plan approved by the board as a succession of the restructuring and recapitalisation efforts implemented to secure the required funding for the ongoing and future projects portfolio in the region."

“The key objective is diversification of our financing; and the sukuk offers a sharia compliant platform that is appealing and reassuring to a larger spectrum of investors, and most importantly to our shareholders,” stated Abou Diwan.

He said after the successful completion of its debt restructuring program across key markets and the stabilisation of the business in the first quarter, DSI's goal is to use the proceeds of the sukuk to enhance the operational capacity of the group in the MEP sector.

"We are also concurrently working closely with our banks to secure the required working capital facilities for our new projects portfolio and the targeted project awards scheduled for announcement in April 2018," he added.-TradeArabia News Service