Arabtec to restructure after $2.4bn deals in 2015
The UAE contractor has reportedly picked AlixPartners to implement a restructuring process expected to boost the loss-hit contractor, which is eyeing job cuts in 2016
Loss-hit contractor Arabtec has appointed a restructuring advisory firm as it seeks to rejuvenate its business activities.
This revelation follows earlier statements by chairman Mohamed Al Rumaithi, who confirmed he is eyeing job cuts in 2016 to support the company's streamlining and cost reduction activities.
According to Reuters, AlixPartners has been picked for the restructuring process.
AlixPartners will offer recommendations on how to boost the company's funds and cash flows to support its new project awards, the report said.
Sources who revealed this information chose to remain anonymous.
Arabtec declined to comment on AlixPartners' appointment when contacted by Reuters on Sunday, but signalled the company is embarking on a new strategy that will be rolled out in 2016.
"It is a refined strategy, rather than a wholesale revamp," said Steven Salo, Arabtec's investor relations head.
This will include increased focus on its core business, and sale of non-core assets.
Earlier this month Rumaithi confirmed Arabtec will streamline its operations to realign its focus on construction activities.
"There's some fat to be taken out," he said.
Speaking at an annual shareholders' meeting, Rumaithi said Arabtec was awarded deals worth $2.4bn (AED9bn) last year.
According to Al Bayan daily, Rumaithi also said the company is not facing any difficulty sourcing capital through banks, and does not foresee bond issues anytime soon.
The contractor's share price has dropped 76% since May 2014, with Arabtec reporting a $640m (AED2.35bn) net loss in 2015.