Drake & Scull to refinance $272 mln Saudi debt in Q1

Dubai-listed Drake & Scull International (DSI) expects to restructure and refinance $272.48 million (SAR 1.02 billion) worth of debt in Saudi Arabia in the first quarter of 2018, it said in a bourse statement on Monday.

Terming the restructuring process as an "upcoming strategic priority", the company said it is currently in advanced talks with creditors in the Kingdom and hopes to complete the refinancing of its Saudi projects debt in this quarter.

Meanwhile, DSI said it has successfully completed the restructuring of its corporate general bank debt in the United Arab Emirates, and secured new credit lines and working capital facilities for its ongoing and new projects portfolio in the country.

The company had reached a consensual agreement with nine regional and local banks to refinance to refinance AED 566 million, comprising 56 percent of its total corporate general debt standing at AED 1.07 billion as of Sept. 30, 2017.

The tenor and the maturity of the AED 566 million debt have been extended and re-termed on average for three years, DSI said.

The firm added that it would discuss with sukuk holders refinancing the remaining tranche of corporate general debt, comprising AED 440 million in sukuk, maturing in November 2019.

“The company will initiate talks with its sukuk holders to refinance this tranche in the second half of the fiscal year 2018,” the statement said.

As of September 30, 2017, the total bank debt of the group stands at AED 2.92 billion.

Following the completion of the debt restructuring, DSI said Tabarak Investment would fully extend its support to achieve full operational recovery.

In August 2017, Tabarak had granted an interest-free “Qard Hasan” loan of up to Dh100 million to DSI, as part of DSI's capital restructuring program.

The contractor has been hit hard by a slowdown in the region’s construction sector, as governments slashed spending in the wake of low oil prices.