Burj Khalifa builder Arabtec to close down, file for liquidation

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The move will have huge impact on jobs since the firm has about 40,000 employees, who include a large of Indians. It will also hit hard scores of suppliers and sub-contractors across the Persian Gulf. 

UAE construction giant, Arabtec Holding that built the world's tallest building the Burj Khalifa has announced its liquidation sending shockwaves across thousands of workers, including a large number of Indians and scores of suppliers and sub-contractors in the Gulf region.

According to Dubai-based English daily Khaleej Times, the company’s shareholders have approved the board's plan to close down the company. The shareholders also authorised Arabtec to appoint AlixPartners and Matthew Wilde, or any other person or persons the board considered fit, as liquidator.

"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 a statement.

Arabtec Holding posted a Dh774.5 million net loss in 2019, citing weaker income from its construction business amid tighter liquidity in the construction sector.

The company is also in the process of appointing an advisor to work on capital and debt restricting plan after reporting losses and weaker revenues in the first half of 2020.

The move for liquidation will have a huge impact on jobs since the firm has about 40,000 employees, according to Jaap Meijer, head of equity research at Arqaam Capital.

"In recent years, limited liquidity in the construction sector impacted the progress of Arabtec's projects and this has been exacerbated by the effects of COVID-19," said Waleed Al Mokarrab Al Muhairi, Chairman, as reported by Gulf News.

"Despite efforts to pursue legal and commercial entitlements and a restructuring of the company's finances and operations, the situation in which Arabtec finds itself today is untenable," he added.

"Over the coming weeks, the company's board and management will work closely with regulators to maximise value for all stakeholders," the Chairman said. "Our current priority is to ensure that everyone directly affected by this decision, is treated fairly during this challenging time (with inputs from media reports)

Image Credit: Bloomberg

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