DUBAI/October 6: The decision of Arabtec shareholders on the company’s liquidation about six days ago failed to make it to the DFM’s company ‘Disclosures’ List’ for five days until it finally appeared on October 5.
The fact that this crucial news, probably the most important development in Arabtec Holding’s history since its listing, has been denied to avid investors on Dubai Financial Market (DFM) for close to a week is said to have bemused the market.
The regulation mandates that any material development regarding any company listed on the market on any given day is supposed to be disclosed to the investors through the market platform before the market opens for trading next day.
The shareholders of Arabtec Holding, one of the most storied companies in the region, and also the contractor that fulfilled the ‘tallest dream’ of the country – Burj Khalifa, had decided to seek company’s liquidation on September 30 at the shareholders’general meeting.
This was necessitated by the condition that the company’s accumulated losses had far exceeded 50 per cent of its paid-up capital.
But unfortunately, the news appeared as part of DFM’s company Disclosures list only on Monday, October 5. In fact, the letter that has been sent to the market (DFM) by Arabtec announcing the liquidation appears to be dated September 30, but the disclosure was available on DFM site only on October 5.
About ten news items of Arabtec Holding had appeared as disclosures on DFM site in the past two weeks alone, and those include two news exchanges regarding the general meeting of shareholders, where this historic decision was taken.
A conclusion can’t be drawn on whether the delay had been committed from the company side in forwarding the letter to DFM, or whether DFM sat on the letter for five days holding back the timely disclosure.
There are a few others who argue that the regulation regarding this seeks the timely disclosure of price sensitive information to the market. “And in Arabtec’s case, since the trading of the company’s shares was suspended the next day itself, the delay in the disclosure of liquidation should not ideally make any difference for the investors.
But having said this, some stock market experts vehemently argue that irrespective of whether the shares are going to be traded or not, it’s the company’s commitment to communicate all developments to the market where its shares are listed.
The shareholders decided to discontinue with the operations of the company and dissolve it due to its untenable financial situation.
“The resolution was made after considering a number of strategic alternatives considered by the Arabtec’s Board based on the financial analysis prepared by the specialist restructuring firm Alix Partners,” a company release on Monday said.
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.
The company said that in the meantime, Arabtec’s primary objective is to provide stability for staff, subsidiaries, sub-contractors, suppliers, and other stakeholders. Waleed Al Mokarrab Al Muhairi, Chairman of Arabtec, said that in recent years, 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