Arabtec Holding shareholders have authorised the board of the Dubai-listed construction company to file for liquidation due to its untenable financial position following the fallout from the coronavirus pandemic, an internal company email said.
Shareholders also authorised Arabtec to appoint AlixPartners and Matthew Wilde, or any other person or persons the board considered fit, as liquidator, two sources told the Reuters news agency.
“Unfortunately, against a backdrop of adverse market conditions, we regret to inform you that Arabtec shareholders voted to adopt a plan of liquidation and dissolution due to the company’s untenable financial situation,” the company said in the email seen by Reuters on Wednesday.
Arabtec could not be immediately reached by Reuters for comment.
Arabtec held a general assembly on Wednesday to decide whether to continue operating or liquidate and dissolve the firm after the COVID-19 pandemic hit projects and led to additional costs.
Shares of Arabtec Holding, which helped build the Louvre Abu Dhabi and the world’s tallest skyscraper, the Burj Khalifa in Dubai, had more than halved in value this year when they were suspended pending the shareholder meeting.
The company, which last month posted a first-half loss of 794 million dirhams ($216m) and total accumulated losses of 1.46 billion dirhams ($398m), said on September 9 that it was calling the general assembly under an article of United Arab Emirates company law.
The law requires companies to vote on whether they should continue operating if their accumulated losses amount to half of their issued share capital.
Several UAE companies have sought to extend debt maturities or agree better terms in recent years to avoid defaults after an oil-price crash hit energy services and construction.
Last week, creditors started to enforce claims against Abu Dhabi-based Al Jaber Group, which has struggled since building up debt in the wake of the UAE real estate crisis.
Another Dubai-listed construction firm, Drake & Scull, is working under UAE bankruptcy law to reach an agreement with its creditors in an out-of-court process.